The Small Employer Insurance Credit

The IRS has recently issued tax payer friendly updates to the Small Employer Insurance Credit.

Eligible Small Employers – To be an Eligible Small Employer, the employer must meet all the following requirements to qualify for the credit:

  • Must employ no more than 25 Full Time Equivalent (FTE) employees during their tax year.
  • Must pay annual FTE wages that average no more than $50,000.
  • Must have a qualified insurance plan (or arrangement) that requires the employer to pay at least 50% of the premiums on a uniform basis for qualifying health insurance coverage on behalf of all employees who enroll in the plan.

What is Qualifying Health Care Coverage – Eligible Small Employer Insurance Credits are paid only for qualifying health care coverage. Plans covering different types of benefits must be tested to determine if the plan is qualified.

If you think your business may qualify, give us a call and we will:

  1. Explain a special transition rule which applies only for 2010.
  2. Explain why some individuals in your organization may not be treated as employees for purposes of the Small Employer Insurance Credit.
  3. Help determine if your business may qualify for the credit.
  4. If your business qualifies, we will help you calculate the amount of your credit.