The Farm CPA
Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
Free Money Not Taken
May 30, 2012
The GAO just reported that for the 2010 tax year 170,300 small employers claimed the small employer insurance tax credit, but the number of eligible small businesses that could have taken the credit ranged from 1.4 million to 4 million. The average credit claimed was about $2,700.
According to a Medical Expenditure Panel Survey (MEPS), up to 83% of employers who may otherwise be eligible for the full credit do not offer health insurance.
The study found that the small amount of potential credit and the paperwork burden involved in gathering the data to fill out the form is not a big enough incentive for small employers to provide health insurance.
I have prepared several returns taking advantage of the credit and their is some paperwork involved, but I find that if your records are in good order and you have less than 20 employees, it really only takes a few minutes to do the proper input.
If you do provide health insurance to your farm employees, review this with your tax advisor. You may be able to claim the credit and reduce your tax by several thousand dollars.