The new health care law includes an opportunity for small non-profits to help lower the cost of group health insurance by 25%.
If you provide group healthcare coverage and meet certain requirements, your nonprofit will be eligible for a federal income tax credit for 25% of the cost of those programs.
The program was designed to encourage nonprofit organizations to offer health insurance coverage for the first time or to help maintain the coverage they currently have.
For tax years 2010 to 2013, the maximum credit is 25% of the premiums paid by your nonprofit.
Starting in 2014 the maximum credit will increase to 35%.
If you are a non-profit that provides health, dental or vision insurance coverage to your employees you may qualify for the Small Business Health Care Tax Credit.
Three Simple Steps 1.
Do you have less than 25 full-time employees on your group health insurance? 2.
Do you pay at least 50% of single premium cost? 3.
Do the average wages of your full-time employee's amount to $50,000 or less? If you answered yes to all of the above - you may be able to claim the tax credit.
What non-profit organizations are eligible? Your non-profit would be eligible if it is incorporated as a 501(c).
A non-profit that is an agency or instrument of the federal, state or local government will not be qualified for the credit.
Farmers cooperatives (section 521) are eligible for the credit.
What is the maximum amount? Nonprofit organization's can claim a maximum healthcare tax credit of 25%.
The maximum credit goes to smaller non-profits - those with 10 or fewer full-time employees, paying average wages of $25,000 or less.
The credit is completely phased out for employers that have 25 or more full-time or that pay average wages of $50,000 or more per year.
When would I be eligible? Small non-profits can claim the credit starting with the 2010 income tax return they file in 2011.
Could you please show an example? Example-2011 tax year non-profit: 10 employees $25,000 wage full-time employee's 100% of premium is paid by nonprofit $100,000 annual healthcare expense $25,000 annual savings Who is considered a full-time equivalent employee? A full-time equivalent employee is generally considered to be an employee who works on average a sum total of 2080 hours for a calendar year [40 hours during a 52 week period].
Your organization may offer employee benefits to employees who do not work on average 40 hours over a 50 week period.
Eligibility for tax credit is based on the number of full-time employees not the total number of employees.
What expenses are counted in calculating the credit? Only premiums paid by organizations are counted in calculating credit.
If your nonprofit pays for 75% of the health insurance premium- you would receive credit for 75%.
What employee benefits are available for tax credit?
If you provide group healthcare coverage and meet certain requirements, your nonprofit will be eligible for a federal income tax credit for 25% of the cost of those programs.
The program was designed to encourage nonprofit organizations to offer health insurance coverage for the first time or to help maintain the coverage they currently have.
For tax years 2010 to 2013, the maximum credit is 25% of the premiums paid by your nonprofit.
Starting in 2014 the maximum credit will increase to 35%.
If you are a non-profit that provides health, dental or vision insurance coverage to your employees you may qualify for the Small Business Health Care Tax Credit.
Three Simple Steps 1.
Do you have less than 25 full-time employees on your group health insurance? 2.
Do you pay at least 50% of single premium cost? 3.
Do the average wages of your full-time employee's amount to $50,000 or less? If you answered yes to all of the above - you may be able to claim the tax credit.
What non-profit organizations are eligible? Your non-profit would be eligible if it is incorporated as a 501(c).
A non-profit that is an agency or instrument of the federal, state or local government will not be qualified for the credit.
Farmers cooperatives (section 521) are eligible for the credit.
What is the maximum amount? Nonprofit organization's can claim a maximum healthcare tax credit of 25%.
The maximum credit goes to smaller non-profits - those with 10 or fewer full-time employees, paying average wages of $25,000 or less.
The credit is completely phased out for employers that have 25 or more full-time or that pay average wages of $50,000 or more per year.
When would I be eligible? Small non-profits can claim the credit starting with the 2010 income tax return they file in 2011.
Could you please show an example? Example-2011 tax year non-profit: 10 employees $25,000 wage full-time employee's 100% of premium is paid by nonprofit $100,000 annual healthcare expense $25,000 annual savings Who is considered a full-time equivalent employee? A full-time equivalent employee is generally considered to be an employee who works on average a sum total of 2080 hours for a calendar year [40 hours during a 52 week period].
Your organization may offer employee benefits to employees who do not work on average 40 hours over a 50 week period.
Eligibility for tax credit is based on the number of full-time employees not the total number of employees.
What expenses are counted in calculating the credit? Only premiums paid by organizations are counted in calculating credit.
If your nonprofit pays for 75% of the health insurance premium- you would receive credit for 75%.
What employee benefits are available for tax credit?
- Health Insurance that has major medical coverage using HMO's, PPO's, and traditional networks will be available.
No limited major medical or limited fee-schedule insurance programs will be considered for tax credit. - Dental and Vision Insurance are included for tax-credit
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