IRS Issues Notice on Small Business Tax Credit for Health Care

On May 17, 2010 the Treasury Department released more details on the ways certain very small businesses can take a tax credit from the new health care law.Notice 2010-44 provides various guidelines, illustrated by more than a dozen examples on the small employer tax credit.  Issues covered include: seasonal worker exclusion, exclusion of owners family member who work at firm to determine FTE and average wages, vision and dental plans are included in the tax credit eligibility but only if the firm is paying 50% or more of the premium, exclusions of tax credit if employer is paying less than 50% of premium for family coverage, but more than 50% for single (for example), state-level tax credits or subsides will not reduced the federal tax credit, and explains the tax credit phase out if over 10 FTEs (up to 25) and average wages over $25K (up to $50K).  The tax credit may be claim for all of 2010. The notice also requests public comment on issues that should be addressed in future guidance.