Employee Benefits-IRS Provides Forms And Additional Guidance On Small Business Health Care Tax Credit

In a Press Release, dated December 2, 2010, the Internal Revenue Service (the “IRS”) announced that it has issued final guidance for small employers eligible to claim the new small business health care tax credit for the 2010 tax year.

More specifically, according to the Press Release, the IRS has issued, and made available:

–new Form 8941, Credit for Small Employer Health Insurance Premiums, and newly revised Form 990-T;

–the instructions to Form 8941; and
–Notice 2010-82, which is designed to help small employers correctly figure and claim the credit.

The Press Release, and the above forms, instructions and notice, may be found here. The Press Release reminds us that the small business health care tax credit is designed to encourage small businesses and small tax-exempt organizations, which primarily employ moderate- and lower-income workers, to offer health insurance coverage to their employees for the first time or maintain coverage they already have. In general, the credit is available to qualifying employers that pay at least half of the premiums for their employees’ health insurance coverage. The new guidance indicates that a broad range of employers qualify for the credit, including: (1) religious institutions that provide coverage through denominational organizations, (2) small employers that cover their workers through insured multiemployer health and welfare plans, and (3) employers that subsidize their employees’ health care costs through a broad range of contribution arrangements. The Press Release also contains information on the availability and amount of the tax credit, and how the credit may be claimed by using Form 8941 and other returns.