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The IRS and the Department of Health and Human Services will conduct a new round of outreach to small business owners in Orange County and throughout the country. The outreach efforts will target small business owners that may not be aware of whether they qualify for the Small Business Health Care Tax Credit. This tax credit was a part of last year’s Affordable Care Act.

“As the filing deadlines approach, we want to make sure that small business owners don’t leave any money on the table,” said IRS Commissioner Doug Shulman. “Small businesses that offer health insurance should learn about this credit and claim it if they are eligible.”

The tax credit is available to small employers that provide at least half of employee health insurance coverage premiums under a qualifying arrangement. The California employers that are specifically targeted by the outreach are employers and tax-exempt organizations that primarily employ 25 or fewer people with an average income of $50,000 or less. Employers who are not sure if they qualify for the tax credit should consult with an experienced California tax law attorney.

Two important deadlines for small employers are September 15 and October 17. On September 15, small corporations that file taxes on a year basis and requested an extension can use Form 8941 to calculate the small employer health care credit and claim on Form 3800 as part of the general business credit. This is included in a corporate income tax return.

On October 17, sole proprietors who file 1040s and partners and S-corporation shareholders that use 1040 to report income and requested an extension can also claim the credit. Form 8941 is used to calculate the small employer health care credit and it is claimed on Form 3800 and line 53 of Form 1040.

Source: IRS, “As Tax Filing Extension Deadlines Near, IRS and HHS Announce New Round of Outreach to Small Businesses and Practitioners,” IR-2011-90, Sept. 7, 2011