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Affordable Care Act extends tax credits for nonprofits

by Jessica Stone on May 22, 2012

smallbizlogoYou may have heard that the Affordable Care Act provides tax credits for small businesses, but did you know those tax credits could also be granted to nonprofit organizations?

 

A nonprofit can qualify for a tax credit to cover a portion of their health insurance costs if it meets the following criteria:

  • It employs fewer than 25 full-time equivalent (FTE) employees
  • The average annual wage of those employees is less than $50,000 per FTE
  • The organization pays at least 50% of each employee's insurance premium

If you meet these criteria, you can qualify for a tax credit of up to 25% of your premium expenses for 2010-2013, and up to 35% of premium expenses beginning in 2014. Apply for the credit simply by filling out Form 8941 on your income taxes and including the amount on line 44f on the Form 990-T, both of which are available at www.irs.gov. More information about who qualifies and how to get the tax credit is available at our website at www.smallbusinessmajority.org.

Thanks to the Affordable Care Act you can now get some money back just for offering your deserving employees health insurance, and put those extra dollars to good use serving your organization's mission. For more information about the Affordable Care Act, visit www.healthcare.gov.

Jessica Stone manages healthcare outreach to the states out of Small Business Majority's Washington, DC office, where she builds strong relationships with businesses and other organizations across the country.

 

Comments (3)

  1. avatar Malcolm Furgol makes this comment

    Monday, September 24, 2012 @ 12:36

    You may also be interested in this upcoming event on Friday about the Affordable Care Act's impact on nonprofits.

  2. avatar Malcolm Furgol makes this comment

    Monday, September 24, 2012 @ 12:33

    Jim, thanks for your comment. You may find the information here and here helpful.

  3. avatar Jim makes this comment

    Thursday, September 20, 2012 @ 20:03

    The non profit I work for provides mostly 1:1 support in the community to individuals with developmental disabilities who need intensive support to be successful. The organization has about 300 employees. The great majority of the employees work 30 hrs per week. Their average rate of pay is about $12.00 per hour. The hourly rate the organization is paid for working with each person we serve does not stretch further than our current expenses. To be clear, the amount of money each of those people brings into the company after expenses are paid is very low. When the Affordable Care Act is fully implemented, to provide insurance or pay the penalty our executive director believes that our employees will have to take significant decreases in their hourly pay rate. For example, someone now making $12 p/hr would decrease to around $8 per hour. Alternatively, most employees hours would be decreased to 30 hours per week to 25 hours per week. What relief will be available for nonprofits like the one I work for?



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