IR-2010-96 Sept. 27, 2010

Washington – The IRS creates an example of draft forms for small businesses and tax exempt organizations to help them calculate their health care tax credit in case they are decided to file their next year income tax returns. The IRS also makes an announcement how eligible the tax exempt organizations – even though they are not filing their income tax return – and how they can get the credits for 2011 filing season.

The sample draft of Form 8941 is posted by the IRS on their website. This will be their guidelines how to calculate their health care tax credit for both small businesses and tax exempt organizations. To be a part of general business credit to its income tax return, small businesses should include the amount of their credits.

Form 990-T is a revised form used by the tax exempt organizations to claim their health care tax credit from small businesses. This is also used for reporting or paying business income that is unrelated. On the next 2011 filing season, revision of Form 990-T will allow tax exempt organizations – not to get owed on their unrelated business income – and to claim health care tax credit from small businesses.

The availability of this Form 8941 is later on this coming year.

Health care tax credit is included in Affordable Care Act that is signed by the President on this coming march. This credit is specifically designed for small businesses or tax exempt organizations that are employed but earning a moderate or low salary income.

For incoming 2010 – 2013 tax seasons there are changes that will happen. The maximum amount of credit will goes up to 35% premium payments paid by qualified small business employers and 25% premium payments paid by tax exempt organizations. For 2014 tax season the maximum amount of credit will goes up to 50% premium payments paid by small business employer and 35% premium payments paid by the tax exempt organizations.

For smaller employers the maximum credit goes – those who have 10 or less than full time equivalent employees – paying annual average wages of $25,000 or less.