tables and graphs are useful tools, but often they are not enough to fully 
understand the complexities of health care and medical insurance. Regarding the tax bonus credit that many small business employees are eligible, they need all available details - and simple explanations - about
- How does the credit tax on bonuses
- Who is eligible
- How to apply
- the role of employers
How the tax credit works Premium
Thanks to the affordable care Act, also known as Obamacare, the federal government offers tax credits, premiums or health insurance discounts, individuals and families eligible. It is an attractive incentive to purchase health coverage through the insurance market disease state.
Why is it attractive? Specifically, it provides significant cost savings for those involved. For many, it is thousands of dollars to help pay for a life insurance cover.
In addition, loans are advanced to pay, so they can be used to defray the cost of premiums.
Who is eligible
eligibility for the tax credit on premiums is multifaceted, but in short, people are eligible if they meet certain requirements household income and do not have access to affordable health insurance through an employer or government program (such as Medicaid, Medicare or CHIP). Many small businesses eligible employees.
Premium Tax Credit requirements include an annual household income is less than 100 percent to 400 percent of the federal poverty level for the family size. The line is adjusted each year for inflation and the number of people in the household.
For example, a family of four that earns $ 24,250 (100 percent of the poverty line) receives a larger tax credit that a family of four earning $ 97,000 (400 percent)
other requirements include that the employee :.
- Purchasing coverage through the exchange of state or federal
- does not get coverage through a federal program
- not to file as "married filing separately "on tax forms
- can be claimed as a dependent by someone else
How to receive and manage the tax credit on premiums
When a person uses the market to register for coverage of health care, the online tool can estimate the amount of the tax credit on premiums a person may claim for the year.
once a person receives his or her estimated market tax credit number, that person can choose to have all, some or none of its estimated credit paid to the insurance company advance, which is a great boon which lowers the monthly premiums of the person.
Whatever the option selected, anyone who uses the tax credit on premiums must be fully aware of the tax requirements:
- Those who sign for payments advance credit must file a tax return with all necessary supporting documents.
- Those who choose to receive the tax credit on premiums in a lump sum after the calendar year must claim the full benefit has maximized the size of the refund or reduce the overall amount of taxes due.
important forms to remember are:
- 1095-A (Declaration of the health insurance market)
- Form 8962 (premium tax credit ) to be subject to Form 1040, 1040A or 1040NR
additional issues are addressed in IRS Pub 974
the role of employers
small businesses that health insurance does not offer group can use the presence of the tax credit on premiums to help their employees in an innovative way. If an employee chooses an individual health plan through the health insurance market, he or she can qualify for the tax credit. In addition, the employer may establish a defined contribution health plan, allowing refunds provided by the company on health spending.
Whether your small business chooses to start offering refunds health care, it is a valuable service at least give clear your staff, easy to navigate information on the ins and outs of credit tax on bonuses.
Conclusion
As part of the Affordable Care Act, small-businesses and their employees can work together to keep health care premiums as low as possible by understanding the bonus eligibility for the tax credit in 2016.
If you have questions about the tax credit on premiums or contributions determined work health plans let please comment below.
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