Paychex Insurance Agency is offering two tools to small business owners to help ease the tax credit process.
Paychex Insurance Agency, a
subsidiary of Paychex Inc., is making it possible for small-business owners who
provide health insurance to employees to determine if they qualify for the
small-business tax credit under the provisions of the Affordable Care Act, as
well as apply for the credit on their annual tax return.
To help determine
eligibility and provide a look at potential savings, Paychex Insurance Agency
offers a free, Web-based Small-Business Tax Credit Estimator, available via the
company's Website. Created using Internal Revenue Service guidelines, the
estimator calculates the estimated credit based on employees' hours, wages,
premiums and employer contributions. The tool is designed to be a resource for
small employers who currently offer, or are thinking about adding, health
insurance benefits, as well as for employers offering standalone dental and
Recent hearings by the House
Ways and Means Committee indicate low support of the small-business tax credit
among small employers due to the daunting process of first determining
eligibility and then applying for the credit. By not filing for the tax credit,
small businesses are potentially missing the opportunity to receive a health
premium credit now, and when the credit increases in 2014. Paychex Insurance
Agency is offering two tools to small-business owners to help ease this
In addition to the Tax
Credit Estimator, Paychex Insurance Agency offers a new Small-Business Tax
Credit Package to provide business owners with a resource that includes the
information they need to assess their eligibility and file for the health care
reform small-business tax credits. To receive the package for the 2012 calendar
tax year, business owners have to be a Paychex payroll and Paychex Insurance
Agency client for the entire 2012 calendar year. The package includes a "Health
Care Premium and Wage Report," which for each employee reports total annual
employee payroll hours, wages and total insurance premium contributions, along
with the employer's contributions.
"Determining eligibility for
the small-business tax credit is anything but cut-and-dry, and that's why we're
seeing many employers shy away from it, leaving money on the table," said Kevin
Hill, Paychex vice president of insurance and human resource services
solutions. "In our role of partner and resource to our clients, it's our goal
to ensure they have the tools they need to do what's best for them and their
business. That's what we've done with these new tax credit resources."
Made possible through the
new health care reform law, the tax credit is available to small businesses for
tax years 2010 through 2013, and for any two years after that. To qualify for
the tax credit, employers must have fewer than 25 full-time-equivalent (FTE)
employees for the tax year, average annual wages of less than $50,000 per FTE,
and contribute at least 50 percent of the single premium cost for each enrolled
employee. The tax credit is available to employers who provide to their
employees regular health insurance, and/or add-on dental or vision coverage.
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.