Refunds of Health Insurance Premiums to Small Employers

 The Affordable Care Act (often referred to as ObamaCare) provides for refunds to small employers who meet certain requirements.   Many of our churches qualify for the “Tax Credit for Employee Health Insurance Expenses for Small Employers.”   This refundable tax credit is available to churches and church organizations even though they pay no income taxes.

 The “Affordable Care Act” has had some changes and most likely will have additional changes in the future.   But as the law currently stands, these refunds of health insurance premiums are available for the past four years.

To date, we have prepared Health Insurance Tax Credit forms for 23 churches.  These churches have received refunds totaling over $360,000!   The amounts range from $1,139 to over $15,000!  Although there was a filing deadline of May 15, 2011, to claim this credit for the year 2010, Federal law allows refunds up to three years after the original due date.   In other words, refunds for 2010 can still be filed until May 15, 2014.  Refunds for 2011, 2012 and 2013 are also still available.

The purpose of this letter to you is to ask how we might make it known that many of our churches and other religious employers are eligible for this tax refund.   It can be as much as 25% of the amount of insurance premium paid by the church.

To qualify for the tax credit, there are two basic requirements that must be met:

  • The church must pay at least 50% of the health insurance premium.
  • The plan must be offered (but not necessarily accepted) to all full time employees.

 If these basic requirements are met, there are additional limitations. 

  • Churches must have less than 25 “full-time equivalent” employees.
  • Average annual wages must be less than $50,000.   Nearly all of our churches will qualify for the wages limit because the ministers’ wages are not counted in the calculation of the average wage amount, even though they are counted for the “full-time equivalent”.

Also available on our web site is a form that can be used to provide us the info to determine the amount of the possible refunds for each year.    Our fee to prepare the HITC forms has ranged from $100 to $250 per refund.  

 We would like to talk with you about how to spread the word of these potential refunds. 

Because of Him,           

Tom and Karen

Posted under Health Insurance

This post was written by burbrink on January 9, 2014

HEALTH INSURANCE TAX CREDIT

To qualify for the tax credit, there are two basic requirements that must be met:

  • The church must pay at least 50% of the medical insurance premium for employees.
  • The plan must be offered (but not necessarily accepted) to all full time employees.

To determine if your church qualifies for the Health Insurance Tax Credit, the following information will be needed (download the form here):

DATA FOR HEALTH INSURANCE TAX CREDIT

Number of full-time ministers 

Number of full-time employees (non-ministers)

Number of part-time ministers (hours per year)

Number of part-time employees (non-ministers)(hours per year)

Medical insurance premiums paid by church     $

Medical insurance premiums paid by employee via payroll deduction  $

 

Payroll data from your Forms W3 and W2s sould enable us to see if your meet all requirements for this tax credit.  We have to calculate the FTE (Full Time Equivalency) for this credit.

tom@burbrink.com

Posted under Health Insurance

This post was written by burbrink on January 9, 2014