The Internal Revenue Service (IRS) has updated its online tools to help small businesses take advantage of the Small Business Health Care Tax Credit, which was included in the health care reform bill, and the Hiring Incentives to Restore Employment (HIRE) Act, signed into law March 18 by President Obama.  

The health care tax credit is designed to help small businesses afford health insurance coverage for their employees. The credit is worth up to 35 percent of a business’ premium costs in 2010, and the amount increases to 50 percent of premium costs in 2014.  The IRS has issued new guidance to help small businesses understand if they qualify and how to take advantage of the credit.  The IRS also is asking for feedback on what issues should be addressed in future guidance.   

For more information, including scenarios illustrating how the credit applies in varying circumstances and how to determine which businesses are eligible for the tax credit, visit the IRS website.  

In addition, the IRS has posted Form 941 (revised for use beginning with the second calendar quarter of 2010) that eligible employers can use to claim the payroll tax credit which was included in the HIRE Act.  Under the HIRE Act, employers that hire unemployed workers after Feb. 3, 2010 and before Jan. 1, 2011 may be eligible for a 6.2 percent payroll tax incentive, which essentially exempts them from  their share of Social Security taxes on wages paid to such employees after March 18. In order to qualify, the newly hired worker may not have been employed for more than 40 hours during the 60-day period before beginning work.  For more information on the HIRE Act, click here.

For an overview of what to expect from the health care reform bill over the course of the next several years, ABC offers a health care timeline in addition to an archived webinar titled, “How Will the New Health Care Reform Law Impact Employers?”