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On May 17, 2010 the Treasury Department released more details on the ways certain very small businesses can take a tax credit from the new health care law. Notice 2010-44 provides various guidelines, illustrated by more than a dozen examples on the small employer tax credit.
Issues covered include:
- Seasonal worker exclusion,
- Exclusion of owners family member who work at firm to determine FTE and average wages,
- Vision and dental plans are included in the tax credit eligibility but only if the firm is paying 50% or more of the premium,
- Exclusions of tax credit if employer is paying less than 50% of premium for family coverage, but more than 50% for single (for example),
- State-level tax credits or subsides will not reduce the federal tax credit,
- Explains the tax credit phase out if over 10 FTEs (up to 25) and average wages over $25K (up to $50K).
The notice also requests public comment on issues that should be addressed in future guidance.
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