The IRS has released additional guidance material to help eligible small employers claim the new small business health care tax credit for the 2010 tax year. The tax credit, created by the Affordable Care Act, is targeted to small businesses that employ moderate- and lower-income workers, and contribute an amount equivalent to at least half of the premium cost of providing health insurance coverage to employees. Eligible employers can use Form 8941 – Credit for Small Employer Health Insurance Premiums – to calculate their credit amount, which will then be included as part of the general business credit on their income tax returns. Tax-exempt organizations will claim their credits via the small business health care tax credit on a revised Form 990-T, Exempt Organization Business Income Tax Return. The new guidance includes a final version of Form 8941, (pdf) instructions (pdf) for this form, a revised Form 990-T, (pdf) and Notice 2010-82, (pdf) which is designed to help small employers correctly calculate and claim the credit.

More information about the health care tax credit, including a step-by-step guide to claiming the credit and answers to frequently asked questions, is available on the IRS’s Affordable Care Act page.

This entry was written by Ilyse Schuman.