Credit for Small Employer Health Insurance Premiums
On March 30, 2010, President Obama signed the Health Care Reconciliation Act which added a tax credit for employee health insurance expenses of small employers for taxable years beginning in 2010 through taxable years beginning in 2013. The tax credit is available if: (1) the employer has fewer than 25 full-time equivalent employees (FTEs) (2) the average annual wages per FTE is less than $50,000, and (3) the employer maintains a “qualifying arrangement” The credit is fully available to an employer with 10 FTEs and average annual wages of $25,000. The credit phases out pro rata so that an employer with 25 FTEs with average annual wages of $50,000 is not entitled. Number of Employees for the Taxable Year The number of FTEs is determined by counting employees who perform…