Small Nonprofits Benefit from Healthcare Reform Bill Tax Credit
AKRON, Ohio (April 12, 2010) - The Patient Protection and Affordable Care Act provides a special tax credit for small businesses and smaller nonprofit organizations that provide health insurance coverage to employees. The credit is available to organizations with less than 25 full-time employees that pay wages averaging less than $50,000 per employee per year.
To be eligible for the credit, organizations have to pay at least half the cost of single coverage for employees.
The maximum credit for nonprofits is 25 percent of premiums paid in 2010. That will increase to 35 percent in 2014. Organizations with 10 or fewer full-time employees and paying average wages of $25,000 or less will receive the maximum credit. (Note: one part-time employee equals half of a full-time employee, so 10 part-time employees equal five full-time employees).
The IRS plans to issue guidance on how to claim the credit for tax-exempt organizations. In the meantime, smaller nonprofit organizations should assess their eligibility for the credit and be on the lookout for more information from the IRS in the mail.
If you have any questions or would like more information regarding this alert, please do not hesitate to contact Lori Sheets, CPA, Nonprofit Services Group at 330.762.9785 or by email.
To be eligible for the credit, organizations have to pay at least half the cost of single coverage for employees.
The maximum credit for nonprofits is 25 percent of premiums paid in 2010. That will increase to 35 percent in 2014. Organizations with 10 or fewer full-time employees and paying average wages of $25,000 or less will receive the maximum credit. (Note: one part-time employee equals half of a full-time employee, so 10 part-time employees equal five full-time employees).
The IRS plans to issue guidance on how to claim the credit for tax-exempt organizations. In the meantime, smaller nonprofit organizations should assess their eligibility for the credit and be on the lookout for more information from the IRS in the mail.
If you have any questions or would like more information regarding this alert, please do not hesitate to contact Lori Sheets, CPA, Nonprofit Services Group at 330.762.9785 or by email.