1. Who Qualifies?
Employers Paying 50% or more of premiums
Single Employee Rate
Maximum Singe Rate is "State Small Group Market Rate"
Substitute Premium
Maximum Single Annual Rate for Ohio =$4,667
25 FTE's or Less
Who is an FTE (full time equivalent)
Constructive Ownership
Multiple businesses under Common control
Excluded: employees related to owner
child, grandchild, step child
sibling, step sibling, in-laws
parent, inlaw, grandparent
aunt, uncle
niece, nephew
Seasonal Employees excluded
Leased Employees included
How are FTE's calculated
40 hours per week or more = 1
Part time divided by 2080 (yr) = partial FTE
Qualifying Arrangement
Defined in Section 1301 of the Act
Annual Wage per FTE less than $50,000
2. How Much Is It?
2010-2013: 35% of employers cost (25% tax exempt)
Jan 1, 2014: 50% of cost (35% tax exempt)
Phase-out
FTE phase-out
Starts at 10 FTEs
Complete at 25 FTEs
Average Wage Phase-out
Starts at $25,000
Complete at $50,000
Tax Exempt Employer
credit is lesser of calculation or sum of Medicare & Withholding Taxes
3. How Is It Calculated?
Step 1: Determine Employer Cost
Step 2: Compute Credit Before Reductions
Step 3: Compute FTE based Reduction
Step 4: Compute Wage based Reduction
4. When Do I Get It?
Annual Tax Return
Sole Proprietor: Form 1040
S Corp, Partnership, LLC: Form 1040
C Corp: Form 1120
Estimated Payments
Quarterly Estimates May be Reduced by the amount of the credit
Limitations
Credit cannot exceed income tax liability
1 year carry back (2011) of excess credit 20 years forward
About
Title
Small Business Health Care Tax Credit
Subject
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Company
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Author
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Version
46
Comments
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