Small Business Health Care Credit May Benefit Tax-Exempt Employers


November 2, 2010
(PDF 103 kB)
Bookmark and Share

The Affordable Care Act, enacted on March 23, 2010, provides a tax credit to certain small businesses and tax-exempt employers that provide health coverage to their employees, effective with the organization’s tax year beginning in 2010. Qualifying organizations described in Section 501(c) that are exempt from tax under section 501(a) may be eligible for the credit. Organizations eligible for the credit include charitable organizations exempt from tax under Internal Revenue Code (IRC) Section 501(c)(3), social welfare organizations exempt from tax under IRC Section 501(c)(4), unions and agricultural organizations exempt from tax under IRC Section 501(c)(5), associations exempt from tax under IRC Section 501(c)(6), social clubs exempt from tax under IRC Section 501(c)(7), and credit unions exempt from tax under IRC Section 501(c)(14).

In order to be eligible for the credit, an organization must pay at least 50% of the cost of employee health care coverage, have fewer than 25 full-time equivalent (FTE) employees, and the average annual wage may not exceed $50,000 per employee.

See full article for more information.

View all