We tend to talk more about the tax costs of Obama Care and forget about some of the tax savings that are available. One of those savings is for employers that cover part or all of their health insurance premium costs.
This credit is allowed in full assuming less than 11 employees and average wages of $25,000. It is fully phased out if you employ more than 25 employees or the average wage is greater than $50,000. A 35% credit is available during years 2010-13. For 2014-15, the credit can be up to 50%.
Many employers have not taken advantage of this credit since there is some paperwork involved. However, if you pay a substantial amount of your employee’s health insurance premiums and you meet both two tests, it is worth the paperwork. However, if your average wage exceeds about $45,000, it may not be worth all of the paperwork involved.
Paul Neiffer, CPA