Who qualifies for the small employer
health insurance credit? What is the shared responsibility penalty, and does it apply?
In order to qualify for the small employer
health insurance credit, an employer must meet three requirements.
Small Employer
Health Insurance credit available to small businesses that incur health insurance costs.
Small Employee
Health Insurance Credit: A new credit is provided for a qualified small employer for nonelective contributions to purchase health insurance for its employees.
THE INTERNAL REVENUE SERVICE has published a table that small employers can use to calculate their
health insurance credit for the 2010 taxable year.
Self-employed professionals including partners and sole proprietors, 2% shareholders of an S corporation, and 5% owners of the employer are not treated as employees for purposes of the Small Employer
Health Insurance Credit. In fact, a special rule prevents sole proprietors from receiving the credit for the owner and their family members.
Without spousal employment, you only receive a 70%
health insurance credit, for a 30% tax savings, instead of the full write off on Schedule C and lower social security taxes.
For example, the refundable
health insurance credit introduces a new phase-out; and the
health insurance credit, the failing public schools credit, and the energy tax credits introduce many complex new qualification requirements that will consume scarce Internal Revenue Service administrative resources and likely be confusing to affected taxpayers.
(1) Basic credit; (2)
Health insurance credit; (3) Newborn child credit.
The
Health Insurance Credit may be taken in addition to the basic credit.
If you take an itemized deduction for medical expenses, the amount of your deduction must be reduced by the
health insurance credit you are claiming for the year.
They included the American Opportunity Credit, additional child tax credit, Regulated Investment Company credit, adoption credit, refundable prior-year minimum tax credit, and
health insurance credit. The American Opportunity Credit decreased 23.3 percent, from $11.7 billion to $9.0 billion.
