The Arc of Illinois

June 18, 2010

Leaders in The Arc:

As a small employer, we have been working with our accountant and insurance broker to see if we are eligible for the Small Business Health Care Tax Credit as a non-profit.

I wanted to share with you what we have learned and encourage you to look into this credit for your organization.

The IRS has posted information available on the new health reform law which gives a tax credit this year to certain small employers (25 employees or less) who provide at least 50% of the cost of health care coverage to their employees.

 To find out if your organization qualifies for the Small Business Health Care Tax Credit, follow the steps outlined in this link for information on the credit as it applies for 2010-2013. 

 The maximum credit for a tax-exempt qualified employer is 25% of the employer's premium expenses that count towards the credit.

Here is the link to the IRS and the information regarding the tax credit for non-profits regarding health insurance.  There is a step by step "test" that is listed on one of the information sheets that helps a business determine whether they will qualify for the credit.  Each business must do this on their own. Evidently non-profits would have the credit applied against their federal tax withholding. 

I suggest that each chapter work with their auditors and payroll professionals to get a handle on this new procedure.   This is brand new information, dated May 20th, and is for tax credits for 2010, providing no changes are looming in the future!

 When you click on the link you will see "Affordable Care Act Tax Provisions".  Scroll down to "Small Business Health Care Tax Credit".  The test is here, fact sheets and examples to explain the program.

 http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6

Tony Paulauski

The Arc of Illinois

815-464-1832