Healthcare Tax credit Scheme for small corporate

Smaller business units often operate at lower margins of profits and also have low overhead cost. As a result of this they offer lesser benefits for their employees. Typically such establishments employ low wage earning individuals which are not technically skilled representing weaker section of the society. But still the business units are labour incentive and have capacity of generating employment. Internal Revenue Service Department also offers certain benefits for such organizations with respect to money spent by them towards providing health care facilities for their employees.

These units often pay 50% or less of health insurance premiums for their employees. As per the latest provisions of IRS such small organizations can claim Healthcare Tax credits for upto 35% of the insurance premium paid for their employees in the year 2010. Bigger organization can available maximum of 25% of insurance premium paid for their employees as Healthcare Tax credit. The benefits can be availed till the year 2013. From year 2014 onwards there limits will be raised to 50% for smaller organizations and 35% for larger business establishments.

What decides the size of these organizations? IRS has fixed the number of Full Time Employees (FTE) as criteria to establish the size of an organization for claiming Healthcare Tax credits. If the full time employs are less than 10 maximum benefits can be availed under this scheme. Maximum number of FTE limit of 25 has been set to decide if an organization can claim any benefits at all or not.

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