Even if you have no taxable income, you may be eligible to receive the credit as a REFUND so long as it does not exceed your income tax withholding and Medicare tax liability. The refundable portion of credit is subject to sequestration. You must file Form 990T, Exempt Organization Business Income Tax Return in order to claim the credit, even if you don’t ordinarily do so.
The small business health care tax credit benefits employers that:
To be eligible for this credit, you must have purchased coverage through the small business health options program, also known as the SHOP marketplace.
For Tax Years 2010 through 2013, the maximum credit is 25 percent of the premiums paid for small tax exempt employers such as charities. For tax years beginning in 2014 or later, the maximum credit increases to 35 percent of premiums paid. The credit is available to eligible employers for two consecutive taxable years. To be eligible a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through SHOP.
If you can benefit from the credit this year but forgot to claim it on your tax return, there’s still time to file an amended return. Refund limitations may apply. Generally, a claim for refund must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid.
If you have any questions, please contact Soma Ganesh of Association Industry Services Group at 301-231-6200.