When is the tax credit available ?

• New federal Health Care Reform legislation provides a tax credit to small businesses for contributing toward their employees' health insurance premiums beginning with the 2010 tax year.

Who qualifies ?

• Businesses with fewer than 25 full time employees [part time employees are included on a pro-rated bases] with average annual wages of less than $50,000. Owners are excluded from the calculation and the tax credit.

• The employer must pay at least 50% of the total premium cost for its employees.

What is the amount of the tax credit ?

• The credit is equal to 35% of the premium (2010 - 2013) and is based on the lower of actual premium .... Ior the average premium in the state. Average premium in Maine has been set at $5,215 for employee only coverage and $11,887 for family coverage

How can you claim the tax credit ?

• The tax credit is part of the "general business credit". If the credit is more than taxes owed the unused credit can be carried forward (or back to prior years). The credit may be applied to the businesses payroll taxes.

*This is intended only as a general overview. There are additional eligibility rules to consider. Health Benefits is available to assist you [and your accountant] in determining your eligibility for the credit. Additional information is available from the IRS on its website www.irs.gov.