Thursday, June 30, 2016

How to Claim a Small Business Health Care Tax Credit

Last week, we asked if your small business was eligible for a health care tax credit. Today, we’re going to answer some of your questions about obtaining that tax credit.

How does an employer claim the credit?
If you’re a small business owner, you can claim the credit on your annual income tax return. You’ll also need to attach Form 8941, Credit for Small Employer Health Insurance Premiums. This form shows your calculation of the credit.

If an employer’s tax-exempt, how would they claim the credit?
If you’re a tax-exempt business, as described in sections 501(c) and 501(a), you can claim the credit by filing Form 990-T (Exempt Organization Business Income Tax Return) with Form 8941. Even if your business doesn’t normally file Form 990-T, you’ll need to file this form to claim the credit.

Can I use this credit to offset my alternative minimum tax (AMT) liability?
Yes; the short answer is that the credit can be used to offset your AMT liability. However, this is subject to certain limitations based on the amount of your regular tax liability in addition to your AMT liability and other allowable credits. For the long answer, consult section 38(c)(1) of the IRS’s Internal Revenue Code.

Can the credit be reflected in determining my estimated tax payments for the year?
Yes, another short, sweet answer directly from the IRS.

Does taking the credit affect my deduction for health insurance premiums?
Again, yes. When you determine your allowable deduction for health insurance premiums, you’ll need to subtract the amount of the credit from the amount of premiums that can be deducted. This way, you can claim both a credit and partial deduction for the same premium payments.

E-filing with ExpressIRSForms
Remember: today’s the last day to e-file your ACA return with the IRS and still be considered on time. You can e-file your ACA forms through your ExpressIRSForms account. And if you have any questions, we’re available by phone (704-684-4751) and live chat Monday through Friday, 9:00 a.m. to 6:00 p.m. ET. We’re also available 24/7 at

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