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You know the tax code is too complicated when large numbers of employers fail to claim tax credits to which they are entitled.  

So it is with the credit for small employer health insurance premiums.

At a breakfast briefing to the NYSSCPA on 9/5/12, Charles Bell of Consumers Union told the group that 81% of NY small businesses can qualify for this credit, but few are actually claiming it.

The credit is available to small employers, those with fewer than 25 full time employees, with average wages under $50,000. The maximum credit for 2011 is 35% of premiums paid, or 25% for nonprofit employers, and it is a refundable credit, so you could claim it even if you owe no taxes. The credit phases out as average wages get closer to $50,000, and as full time equivalent employees ("FTEs") get closer to 50. 

If you think you might qualify, ask your accountant about it, or me, or download Form 8941 and instructions from irs.gov. If you already filed your 2010 or 2011 taxes, fear not, you can still claim the credit on an amended return.

For more information, see the FAQ.


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