Farmington Hills, MI (PRWEB) October 02, 2013
The IRS has issued proposed regulations regarding the small business health care credit which will come into effect for tax years beginning after December 31, 2013. The proposed regulations generally incorporate previous notices to show the differences between the Code prior to 2014 and after 2013.
Under the proposed regulations in order to be an "eligible small employer" (ESE) the employer may not have more than 25 full time employees and the average annual wage per eligible employee cannot exceed $50,000 (adjusted for inflation after Dec 31,2013). There has to be a qualifying arrangement that requires the employer to pay a uniform percentage of the health care costs that is not less than 50% of the premium cost of the coverage.
For tax years beginning after 2013 in order to be eligible the health care must be purchased through a State exchange. It will only be available for a maximum coverage period of two consecutive years.The health insurance credit amount for tax years during or after 2014 is equal to 50% of the ESE's premium payments made under a qualifying arrangement for the qualifying heath plan purchased through a SHOP (Small business Health Options Program).There are also certain employees who are not considered employees when calculating the credit. For example, independent contractors, partners, shareholders owning more than 2%, or family members. The credit is subject to an average premium limitation and other adjustments and phase out limits.
For more information or questions on this topic, please contact your professional at UHY LLP in Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at http://www.uhy-us.com.