Small Business Health Care Tax Credit for churches

The Small Business Health Care Tax Credit

Important Tax Credit Available to Local Churches

The Patient Protection and Affordable Care Act (PPACA) established a small business health care tax credit as an incentive for small employers to provide health insurance coverage to their employees. Additional details are explained in the article: Small Business Tax Credit Information.

Recently, the Internal Revenue Service (IRS) issued guidance that specifically provides local churches and small employers can qualify for the Tax Credit even if they obtain coverage through their denomination’s self-funded health care plan. Tax-exempt organizations with less that 25 full-time equivalent employees are eligible if their average employee wages are less than $50,000 and the employer pays a uniform percentage (greater than 50% of the total premium cost of single, employee-only coverage) for all employees receiving coverage.

The Tax Credit, as it currently stands, is available beginning in 2010 and will remain through 2013.  Eligible tax-exempt organizations wishing to claim the Tax Credit for 2010 must have submitted a Form 990-T by no later than May 15, 2011.