Welcome to 45R Small Business Health Care Tax Credit

Transcription

1 Welcome to 45R Small Business Health Care Tax Credit Presented by the Oklahoma Society of Enrolled Agents and the Internal Revenue Service 1 IRC 45R Small Business Health Care Tax Credit The visual portion of today s presentation will appear on this screen You MUST call in to hear the audio portion: Dial toll free: Conference ID: Today s presenters: Anita Douglas and Yolanda Ruiz 2 1

2 Media Attending this Presentation If you are with the Media please send us an message to: Q & A Group: Anita Douglas and Yolanda Ruiz 3 Before We Begin The telephone lines will be muted. Phone lines can t be unmuted individually. Technical difficulties or questions? Use Chat box on right side of screen Look for either of these symbols Like this Or like this if someone has sent you a text chat Q & A Group: Anita Douglas and Yolanda Ruiz 4 2

3 Welcome! A Couple of Things Text Chat and Q & A Group Click on the bubble on right side of screen Look for Select recipient on lower right Click on drop down arrow Select Q & A Group Type your question The host will view the question and present it to the group after the presentation Q & A Group: Anita Douglas and Yolanda Ruiz 5 CE Credit 1 CE credit will be issued for 50 minutes of attendance starting at the top of the hour Each person must be on separate computer and phone line CE Number is CEQXT-U O Approved audience: Other Tax Return Preparers and Enrolled Agents 6 3

4 Today s Presenters Anita Douglas Oklahoma City, OK Yolanda Ruiz Chicago, IL 7 Small Business Health Care Tax Credit 8 4

5 Latest Information The information contained in this presentation is current as of Aug. 20, For the latest information about tax provisions of the Affordable Care Act, visit IRS.gov/aca. 9 What is the Small Business Health Care Tax Credit? Tax credit for small employers, including taxexempt employers Help with the cost of providing health care coverage for low- and moderate-income workers Designed to encourage employers to offer first-time coverage and maintain existing coverage for employees 10 5

6 Example Employer premium payments per year; 15,000 x 15% = $2,250 $2,250 x 4 years ( ) = $9,000 At 20%: the credit per year = $3,000, two years = $6, Small Business Health Care Tax Credit as a Percent of Employer Contribution to Premiums Average Wage Firm size Up to $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 Up to 10 35% 28% 21% 14% 7% 0% 11 33% 26% 19% 12% 5% 0% 12 30% 23% 16% 9% 2% 0% 13 28% 21% 14% 7% 0% 0% 14 26% 19% 12% 5% 0% 0% 15 23% 16% 9% 2% 0% 0% 16 21% 14% 7% 0% 0% 0% 17 19% 12% 5% 0% 0% 0% 18 16% 9% 2% 0% 0% 0% 19 14% 7% 0% 0% 0% 0% 20 12% 5% 0% 0% 0% 0% 21 9% 2% 0% 0% 0% 0% 22 7% 0% 0% 0% 0% 0% 23 5% 0% 0% 0% 0% 0% 24 2% 0% 0% 0% 0% 0% 25 0% 0% 0% 0% 0% 0% Source: CONGRESSIONAL RESEARCH SERVICE, SUMMARY OF SMALL BUSINESS HEALTH INSURANCE CREDIT UNDER PPACA (P.L ) 3 (Apr. 5, 2010). 12 6

7 Which Employers Qualify? Small employers who: Pay at least half of employee health insurance premiums (single coverage) Have fewer than 25 full-time equivalent employees for the tax year Pay average annual wages of less than $50,000 per FTE 13 Who is Considered an Employee? All employees who perform services during the tax year are taken into account Who s not? The owner A partner Shareholder of S Corporation owning more than 2% Owner of more than 5% of other businesses Family 14 7

8 Are There Any Additional Requirements? Qualified health insurance coverage: Comprehensive health care coverage (pre-2014) For medical care benefits From an insurance company or other state-licensed entity These do not qualify: Accident or disability only Liability only Workers comp HRAs, FSAs or HSAs 2014 transition guidance 15 What are the Changes to the Credit Beginning in 2014? Looking back Credit up to 35% for employers and 25% for tax-exempt employers Looking forward 2014 and future Credit up to 50% for employers and 35% for tax-exempt employers Requires coverage through SHOP (Marketplace) Two consecutive years Cost of living adjustment 16 8

9 How is the Credit Calculated? 17 Form 8941 Common Errors Calculations using full-time equivalent employees Calculations of average annual wages Amounts paid for premiums Calculations using State average premium limitation 18 9

10 How to Claim Use Form 8941 to calculate the credit Small business: include the amount as part of the general business credit on the income tax return 1040, 1065, 1120 or 1120S Tax-exempt organization: include the amount on line 44f of the Form 990-T 19 Additional Savings Options for Some Alternative Minimum Tax offset Carryback/Carryforward unused credit Business expense deduction Refundable for tax-exempt employers 20 10

11 Recap for 2014 and Beyond Small business credit increases to 50% Tax-exempt employers credit increases to 35% Must purchase coverage through SHOP or qualify for transition relief Credit can be claimed for two consecutive taxable years Annual cost of living adjustment starts in 2014 (Note: This is a federal credit; some states may have additional tax credits available, so check with the state) 21 Small Business Health Care Tax Credit Resource Page IRS.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers 22 11

12 Small Business Health Care Tax Credit Online Resources Taxpayer Advocate Service SBHCTC Estimator for Taxpayeradvocate.irs.gov/calculator/sbhctc.htm 23 Small Business Health Care Tax Credit Online Resources Healthcare.gov Small Business Health Care Tax Credit Estimator Healthcare.gov/small-business-tax-credit-calculator 24 12

13 ACA Information Center for Tax Professionals 25 Affordable Care Act Online Resources HealthCare.gov IRS.gov/ACA SBA.gov/healthcare DOL.gov/ebsa/healthreform Business.USA.gov/healthreform 26 13

14 Certificates of Completion Certificates of Completion will be issued by January 29th. If you are an Enrolled Agent, or earning voluntary CE, the CE will show up in your PTIN account within one week after you receive the Certificate of Completion. 27 Continuing Education We get a web report and a phone report which we use to determine CE. If you were NOT able to view the webinar on your computer today, but you are on the phone ONLY, send an to SL.Central.IL.Chicago@irs.gov. Provide the phone number you registered with, and the phone number you used today. Do NOT send the if you are viewing the webinar! 28 14

15 Contact Information Anita Douglas