Friday, October 29, 2010


IRS explains how nonprofits can get health care tax credit

Many of you may be involved as volunteers for non profits. If the non profit has has employees and provides health insurance you might pass this on to the nonprofit.

The Health Care Act created a credit for small businesses and small non profits that provide health insurance to their employees. At the time it appeared to us that many non profits might qualify for this credit. The problem was we were not given any guidance on how to get the credit for nonprofits. Now the IRS has given us the answer.

The Internal Revenue Service has posted information on how a nonprofit under Section 501(c) can claim the Small Business Health Care Tax Credit by filing a Form 990-T with an attached Form 8941 that explains how the claimed credit was calculated. The credit, which is designed to encourage small businesses to offer coverage to their employees, stipulates that the employer must cover half or more of coverage costs for some employees based on the single rate. Companies must have fewer than 25 full-time workers, or the equivalent, to qualify. Here is a complete explanation.

Let me know if you have any questions or need more information.

Larry Kopsa CPA