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 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 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 Examples example1.pdf example2.pdf example3.pdf 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