Business Owners Leave Thousands of Dollars on the Tax Table
The Affordable Care Act (otherwise known as Obamacare) provides a credit for small businesses to help offset the cost of providing health insurance to its employees. Thousands of dollars in credits are left unused each year, primarily by not knowing that the credit exists, and the complication in computing the credit itself.
Who Qualifies: A Business has to employ fewer than 25 full-time equivalent employees, pay an average wage of less than $50,000, and pay at least 50% of the insurance premiums for its employees.
Phase Out: The credit is reduced if the employer has more than 10 employees and if the wage is above $25,000.
Excluded: Self-employed individuals and shareholders of S-corporations are excluded for the credit and for the computations. In addition, their spouses, children, grandchildren, siblings, parents, grandparents, aunts, uncles, nieces, nephews, in-laws, other dependents, and the family pet are also excluded.
The computation is not straightforward, but we’ve created a simple worksheet to see if you could possible qualify for the credit. Click Here to download the worksheet.
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