Reminder: Small Businesses Eligible for Health Insurance Tax Credit
With tax season in full swing, we wanted to remind our clients that certain small employers will be eligible for a tax credit to offset the cost of their health benefit plans. In order to claim the tax credit, small businesses (defined as having 25 eligible employees or less and offering health benefits to all eligible workers) must meet specific criteria. The following is a breakdown of those requirements:
- The business must pay at least 50% of the premiums for healthcare coverage.
- The healthcare coverage must be at least equal to the basic healthcare plan (SGR) coverage recommended by the Small Employer Carrier Committee or the eligible employees have qualifying existing coverage.
- The tax credit is equal to a dollar amount per eligible employee whose total annual earnings do not exceed $40,000.
- The dollar amount of the tax credit is $250.00, as long as it does not exceed the taxpayer’s costs of providing health benefits for the employee during the taxable year.
- A sunset clause in the legislation states that this law will expire January 1, 2009.
For a copy of the legislation, click here. If you have any questions about these rules, please contact our office at 919-403-1986.
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January 23, 2008
Hill, Chesson & Woody Employee Benefit Services
194 Finley Golf Course Rd, Suite 200,
Chapel Hill, NC 27517
Phone: 919.403.1986
Fax: 919.913.0237
www.hcwbenefits.com