Estimated tax payments for the third-quarter (June 1-August 31) of 2011 are due on September 15, 2010. The estimated tax payments should be made using Form 1040-ES. Note, if the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be considered on time if it is made on the next business day.
This is a Small Business Health Care Tax Credit update from a tax attorney in Minneapolis.
Generally, the Small Business Health Care Tax Credit is available to small employers that pay at least half of the premiums for single health insurance coverage for their employees. It is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.
The credit can be claimed by small businesses during the tax years starting 2010 through 2013 and for any two years after that. The maximum credit is 35 percent of premiums paid by eligible small businesses and 25 percent of premiums paid by eligible tax-exempt organizations. Beginning in 2014, the maximum tax credit will increase to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible tax-exempt organizations.
The maximum credit goes to smaller employers –– those with 10 or fewer full-time equivalent (FTE) employees –– paying annual average wages of $25,000 or less. The credit is completely phased out for employers that have 25 or more FTEs or that pay average wages of $50,000 or more per year. Since the eligibility rules are based in part on the number of FTEs, not the number of employees, employers that use part-time workers may qualify even if they employ more than 25 individuals.
Eligible small businesses should first use Form 8941 to figure the credit and then include the amount of the credit as part of the general business credit on its income tax return.
If you have any questions with respect to eligibility or calculation of your small business health care tax credit, contact Sherayzen Law Office to discuss your case with an experienced Minneapolis business tax attorney!
