Free Money Not Taken
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.
Paul Neiffer
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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