Does your small business provide health insurance for your employees?  Then you might be eligible for a special tax credit as part of the health care reform legislation, the Patient Protection and Affordable Care Act, approved by Congress, and signed by President Obama on March 23.

The credit is designed to encourage small businesses to offer health insurance for the first time or to maintain the coverage they already have.  The credit is targeted toward small businesses and tax-exempt organizations that primarily employ low and moderate income workers.  The good news is that small businesses can take advantage of this credit beginning in 2010.  The details of the credit are as follows:

The maximum credit is 35 percent of premiums paid in 2010 by eligible small businesses and 25 percent of premiums paid by eligible employers that are tax-exempt organizations.  In 2014, the credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.  It is generally available to employers that have fewer than 25 full time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year.  Because the eligibility formula is based in part on the number of FTE’s, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers. 

Health CareEligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011.  For tax-exempt organizations, the IRS will provide further information on how they claim the credit.

The IRS will soon be sending out postcards to small businesses encouraging them to take advantage of this credit if they qualify.

More on this can be found on the IRS website, and as always Blackman & Sloop is always happy to assist you in determining if you may qualify for this new and exciting credit.  If you’d like to speak to a professional on this or any other small business issue, please call us at 919-942-8700.

About Blackman & Sloop CPAs, P.A.:

Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit

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