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Small Business Health Care Tax Credit Form Released by the IRS

Date: September 24, 2010

Earlier this month, the Internal Revenue Service released a draft version of the form that small tax-exempt organizations will use to claim the Small Business Health Care Tax Credit. The tax credit is designed to help small employers, including tax-exempt organizations, afford the cost of health insurance coverage for their employees. The credit is primarily directed to employers with employees of low to moderate income.

Tax-exempt organizations will use IRS Form 8941 to calculate the credit and a revised IRS Form 990-T to claim the credit. The IRS has posted a draft of Form 8941 on its website. Form 990-T is currently used by tax-exempt organizations to report and pay the tax on unrelated business income, but the Form 990-T will be revised for 2011 to enable eligible tax-exempt organizations to claim the credit. Form 990-T can be used by a tax-exempt organization to claim the credit even if the organization does not owe tax on unrelated business income. The final version of Form 8941 and its instructions will be available later in 2010.