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Your Nonprofit May Benefit From Two New Tax Credits

by Jessica Lantos

The new health care reform law lets smaller nonprofits claim up to a 25 percent tax credit when they pay for at least half of the health insurance premiums for their employees.

To claim Small Employer Health Credit , the nonprofit must have 25 or fewer full time employees who earn less than $50,000 in average wages and the nonprofit must pay at least 50% of the insurance premium cost for employees. Information about how to calculate the credit is widely available; however, guidance is still lacking on how to claim that credit.

Your organization may receive a postcard from the Internal Revenue Service providing information about the small employer credit. To learn more, here are some great options:

Hiring Incentive Tax Credit

The first new law allows nonprofits of all sizes and other employers to keep the 6.2 percent payroll taxes they typically would pay on certain new hires. The incentive is only available for a short time, and it applies to only certain newly hired workers. Learn more about the HIRE Act and its impact on nonprofits.

This payroll tax forgiveness provision expires at the end of the year, so you will save more the sooner you hire eligible unemployed workers. 

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