Only a fraction of small employers claimed the federal health insurance tax credit in 2010, according to a recent study prepared by the General Accountability Office. Although 170,300 small employers claimed income tax credits averaging $2,700 that year for health insurance costs, there were between 1.4 million to 4 million small employers potentially eligible for the credit.
The design of the credit, targeting low wage small employers, was the likely cause of the limited participation. Eighty-three percent of credit recipients could not use the full amount of the credit reimbursement due to wage and employment levels. Employers also cited complicated standards for calculating FTEs and the complexity of IRS Form 8941 and its 7 worksheets as reasons for not using the credit. See the GAO report. For further information contact Ron Wineholt at .(JavaScript must be enabled to view this email address).
About Ronald W. Wineholt