Eligible small employers can use Form 8941 to figure the credit for small employer health insurance premiums for tax years beginning after 2009. The maximum credit is based on a percentage of premiums that the employer paid during the tax year for certain insurance coverage. For tax-exempt small employers, the credit is generally 25% of premiums paid. For all other small employers, the credit is generally 35% of premiums paid. An eligible small employer must meet the following three requirements in order to claim the credit:
- Paid premiums for employee health insurance coverage under a qualifying arrangement.
- Had fewer than 25 full-time equivalent employees for the tax year.
- Paid annual average wages for the tax year of less than $50,000 full-time equivalent employee.
Instructions for accessing Form 8941 in an S-Corporation (Form 1120-S) Tax Return:
From the Main Menu of the Business Tax Return (Form 1120-S) select:
- Schedule K – Distributive Share Items
- Credits
- Other Credits and credit recapture
- Other Credits
- Credit for Small Employer Health Insurance Premiums
Instructions for accessing Form 8941 in an Partnership (Form 1065) Tax Return:
From the Main Menu of the Business Tax Return (Form 1065) select:
- Schedule K – Distributive Share Items
- Credits & Credit Recapture
- Other Credits
- Other credits
- Credit for Small Employer Health Insurance Premiums
NOTE: This is a guide to entering Form 8941 into the Keystone Tax Solutions Pro program. This is not intended as tax advice.