Q&A on Health Care Credit

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Do you have questions about the Health Care credit?  Here are a couple that were recently submitted by CPE Link webcast participants. Answers provided by Bill Roos, EA.


Q.        For the health insurance credit, are employees that elect out of or are not covered by insurance counted toward total FTE and gross wages? Is pretax insurance withheld from employee paycheck counted in gross wages?

A.         Keep in mind that the purpose of calculating the FTE and the average annual gross wages is to determine who is a small employer. This calculation has nothing to do with the amount of the credit as that is compiled from the health-insurance premiums paid.

Q.        Does the health care credit apply to a fiscal year ending in September, 2010?
A.         No. The effective date of the health care credit is for tax years beginning after December 31, 2009.

Q.        If an employee waives health insurance, is there a violation for the employer?

A.         No. There can be, however, problems for an employer who doesn't provide at least the minimum required insurance plan.

For more helpful information on tax issues like this one, download your free copy of the Federal Tax Update: Part 3 Q&A document offered by CPE Link. As additional questions and answers are added, the document will be updated. Those who have downloaded the original document will receive all updates automatically.

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If you have more questions and would like to continue to participate in the discussion, visit CPE Link’s Discussion Forum. Log into your Facebook account to post a question.

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