IRS Releases Form and Additional Guidance on Small Business Health Care Tax Credit

The Internal Revenue Service recently released final guidance on the small business health care tax credit included in the Health Care Reform enacted earlier this year. A one-page form as well as instructions for small employers, were included in this release.

Small for-profit businesses will use the new Form 8941 to claim the credit for the 2010 tax year. The IRS also posted the Instructions to Form 8941 to help small employers correctly calculate and claim the credit.

The Small Business Health Care Tax Credit, included in the health care reform legislation, signed by President Obama on March 23, is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees.