Hawaii firms may be eligible for tax credits
The Internal Revenue Service has identified at least 18,500 small businesses and nonprofits in Hawai'i that may benefit from tax credits being offered under the recently signed health care reform act.
The IRS said it is mailing postcards to the businesses and nonprofits alerting them about the tax credits that can amount to as much as 35 percent of health plan premiums they pay for workers.
The tax credits take effect for the 2010 tax year and were enacted to encourage small employers to offer health insurance to workers. The IRS began mailing more than 4 million postcards this week.
"We want to make sure small employers across the nation realize that — effective this tax year — they may be eligible for a valuable new tax credit," said IRS Commissioner Doug Shulman in a press statement.
"We urge every small employer to take advantage of this credit if they qualify."
The postcards direct the employers to the IRS.gov to learn more information about qualifying for the tax credit.
To take advantage employers must meet requirements, including having fewer than 25 full-time workers that make average annual wages of less than $50,000. They must also pay at least half of the health care premium. Businesses employing 10 or fewer full-time workers qualify for the maximum credit of 35 percent.
If an employer has more than 10 full-time workers or if they have average annual wages of more than $25,000 the credit is reduced.
For nonprofit groups the maximum credit is 25 percent.