LOS ANGELES--(www.k-a.com) today launched a service designed to help millions of small businesses take advantage of a credit that can be as much as $50,000 per year.)--K&A Accountancy (
“One reason is the complexity of calculating the credit”
The credit is the Small Employer Health Insurance Tax Credit (Code Sec. 45R). According to the Government Accountability Office (GAO), just 170,300 small employers claimed the credit in tax year 2010, out of potentially up to 4 million eligible organizations.
“One reason is the complexity of calculating the credit,” said Christian Payne, K&A CEO. “The IRS estimates that it takes 12 to 16 hours to complete the analysis. That’s why we developed this service – to make it easier for businesses to determine whether or not they qualify, and to claim it if they do. The credit can be as much as $50,000 per year, so it’s worth investigating.”
K&A launched a new website dedicated to this new service: http://kahealthcarecredit.com/.
The firm provides a paper trail proving the calculations in case of audit. K&A’s service is more accurate and comprehensive than free online calculators – as most calculators don’t allow users to optimize the credit and don’t account for tax exempt organizations.
K&A’s service is available to all small business employers and tax-exempt employers, whether or not they are current K&A clients. The fee for K&A’s service is $500 for each tax year analyzed. Once engaged, K&A will request information about employees, their compensation and benefits, among other information. K&A will provide the analysis summary and the completed IRS Form 8941, which is necessary to claim the credit.
The Tax Credit Explained
For tax years 2010 through 2013 the maximum credit is 35 percent of health insurance premiums paid by small business employers (25 percent for small tax-exempt employers). The credit is scheduled to increase to 50 percent for small business employers and 35 percent for small business tax exempt employers after 2013. It terminates after 2015.
However, in tax years that begin after 2013, an employer must participate in an insurance exchange in order to claim the credit, and any modifications and restrictions on the credit apply.
To qualify, an employer must have:
- Fewer than 25 full-time equivalent employees (FTE) for the tax year (owners, their family members and certain part-time employees do not count toward the total number of FTEs).
- Average annual wages of its employees are less than $50,000 per FTE (the wages of owners, their family members and certain part-time employees may not count toward the calculation of this average).
- A “qualifying arrangement” (health insurance) program that is maintained.
For more information, visit http://kahealthcarecredit.com/.
Founded in 1939, K&A (www.k-a.com) delivers full-service accounting and financial consulting that boosts the vitality of business and personal finances to help clients thrive. Combining traditional accounting services with forward-looking financial consulting, K&A provides clients with a comprehensive approach to achieving their personal and professional financial goals – giving clients comfort in the present, confidence in their future and control over the quality of their lives. More than 100 K&A associates serve almost 10,000 clients nationwide. K&A actively acquires other CPA firms, offering options that give retiring CPAs or those who want to expand their practice a comprehensive plan so they can take control of their future. Based in Woodland Hills, Calif., K&A also has offices throughout California and the Midwest.