IRS Issues Form To Claim Small Business Health Care Tax Credit

The Internal Revenue Service has released the final 2011 version of Form 8941, which eligible small employers may use to calculate the small employer health care tax credit, as provided under the Patient Protection and Affordable Care Act (ACA).

The ACA provides a tax credit for small business employers who pay at least one-half the cost of health insurance coverage for their employees. The credit was designed to encourage small business employers to offer health insurance benefits. Furthermore, IRS guidance has provided clarification on how certain arrangements under which an employer pays less than 50 percent for some employees may nonetheless satisfy the uniformity requirement for years prior to 2014.

A September 2011 report issued by the Treasury Inspector General for Tax Administration indicated that far fewer small businesses than anticipated had claimed the credit in 2010. Since then, the IRS and the Department of Health Human Services have expanded outreach efforts to encourage more small businesses to apply for the credit and to consider the credit when planning benefits for future years.

The Form 8941 instructions are here.