Recent Reform Webinar and Seminar QuestionsNovember 8th, 2012 | Healthcare Reform | Seminars & Publications
I had a question from an AICPA listener as to whether governmental entities were eligible to claim the small employer tax credit. Eligible entities are those exempt from tax under 501(a) and described in section 501(c). Most governmental entities do not have 501(c)(3) status. The IRS has an in-depth discussion of governmental entities in http://www.irs.gov/pub/irs-tege/eotopice90.pdf.
The small employer tax credit can be claimed starting in 2010; in 2014 it can be claimed for only two years, however if an employer were to start in 2010, it could effectively claim it for 6 years. If one starts in 2014, one can only claim two years.
GAO analysis of the credit: http://www.gao.gov/products/GAO-12-549
IRS “safe harbor” for employers to avoid play or pay penalty on health insurance is in Notice 2012-58: “for all employees, an employer will not be subject to an assessable payment under § 4980H(b) for an employee if the coverage offered to that employee was affordable based on the employee’s Form W-2 wages reported in Box 1.” I believe this responds to a question raised in my seminar of November 1; however, this does not really address the problem for employers since a spouse, for example, could have significant income, or the employee could have other sources of income, putting them over the subsidy threshold the employer is trying to avoid.
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