New IRS form helps employers calculate health coverage tax credit

The IRS has released a draft version of Form 8941, the form that small businesses and tax exempt organizations will use in claiming the small business health care tax credit for 2010. The small business health care tax credit is one component of this year’s federal health care reform package. It is available to entities that employ fewer than 25 employees, pay average annual wages of less than $50,000 and cover at least 50 percent of the cost of health coverage for employees. Eligible employers may be entitled to tax credits of up to 35 percent of their premium costs for providing health insurance to their employees in 2010. For more information, consult your tax advisor.