Did you know that your church may be eligible to receive up to 25 percent of the amount it pays for employees’ health insurance premiums? The Small Business Healthcare Tax Credit benefits not only small businesses, but also extends to churches and other not-for-profits, regardless of whether they file a Form 990 regularly or not.
RumboughYour church is eligible if it meets the following three requirements: 1) paid premiums for employee health insurance coverage under a qualifying arrangement. Generally, this means that the church, as employer, paid a uniform percentage not less than 50 percent of the premium for employees, 2) has less than the equivalent of 25 full-time employees, and 3) paid average annual wages for the tax year of less than $50,000 per full-time employee.
In order to claim the credit, you will have to complete a few tax forms, even if you do not pay tax and have never filed before. However, do not let that concern you. To get more information on the rules and to see if your church qualifies, go to www.irs.com and click on Businesses. You will see a link to information on the credit.
This credit may extend for a few more years, and you may still be eligible to file for credit on 2010 premiums paid.
Not sure where to begin? Contact your CPA, and he or she should be able to help you determine your eligibility and complete the forms.
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.