How Nonprofits Can Claim the Small Business Health Care Tax Credit
The Patient Protection and Affordable Care Act enacted in March of 2010 included tax credits for small businesses (nonprofits included) who pay at least 50% of their employees’ insurance premiums. Here is a little help for nonprofits seeking to understand the amount of credit they can expect to claim.
Determine Your Eligibility
If you have under 25 employees (FTE) and pay them an average wage that is less than $50,000 per year, you may be eligible. The IRS has created this 1-page document to help you determine your eligibility.
Calculate Your Credit
This can be very complicated depending on your circumstances. We have created a document titled, “Calculating Your Credit” to help you with this; however, many of you will need to consult your accountants. The IRS has created a frequently asked questions page that is very helpful.
Claim Your Credit
To claim your credit, you will need to file Form 8941 in conjunction with Form 990-T. The Form 990-T is currently used by tax-exempt organizations to report and pay the tax on unrelated business income. Form 990-T was revised for the 2011 filing season to enable eligible tax-exempt organization–even those that owe no tax on unrelated business income–to claim the small business health care tax credit.