Instructions For Form 8941 - Credit For Small Employer Health Insurance Premiums - 2010 Page 5
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Example 4. Assume the same facts that were used in
Medicare taxes the tax-exempt employer was required
Example 3. The $60 you contribute each payday toward
to withhold from employees’ wages in calendar year
employee health insurance coverage is 60% ($60 ÷
2010.
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$100) of the weekly premium for each employee enrolled
Medicare taxes the tax-exempt employer was required
in single (employee-only) coverage and 25.21% ($60 ÷
to pay for calendar year 2010.
$238) of the weekly premium for each employee enrolled
Premium Deduction Reduced
in family coverage.
Your deduction for the cost of providing health insurance
In this situation, the total average premium limitation
coverage to your employees is reduced by the amount of
amounts that apply are 60% of the applicable amounts
any credit for small employer health insurance premiums
shown in the single coverage column of Table A for each
allowed with respect to the coverage.
employee enrolled in single coverage and 25.21% of the
applicable amounts shown in the family coverage column
More Information
of Table A for each employee enrolled in family
For more information about this credit, see the following.
coverage.
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Section 45R.
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Notice 2010-44, 2010-22 I.R.B. 717, available at
www.
You have an employee enrolled in single
irs.gov/irb/2010-22_IRB/ar12.html.
(employee-only) coverage who works for you in
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Notice 2010-82 available in Internal Revenue Bulletin
Maryland. The single coverage amount shown in Table A
2010-51 at
and at
for Maryland is $4,837 or $93 ($4,837 ÷ 52) for each
irs-drop/n-10-82.pdf.
weekly payday. The amount you are considered to have
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IRS.gov.
paid toward this employee’s health insurance coverage
based on the average premiums in Table A is $55.80
(60% of $93) each payday.
Specific Instructions
To determine the premiums you would have paid for
this employee during the tax year if the employee had
If your only source for this credit is a partnership,
enrolled in a state-average-premium plan, multiply the
S corporation, cooperative, estate, or trust, skip
TIP
number of pay periods during which your employee was
lines 1 through 14 of the form and report the
enrolled in the health insurance coverage by $55.80. For
credit you received from these sources on line 15.
example, you would have paid $2,901.60 ($55.80 × 52) if
Worksheets 1 through 7 can help you figure the
the employee was enrolled for the entire tax year. You
amounts to report on various lines of Form 8941.
would have paid $558 ($55.80 × 10) if the employee was
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Use Worksheets 1, 2, and 3 to figure the amounts to
only enrolled for 10 pay periods. You will need an
report on lines 1 through 3 of Form 8941.
additional set of calculations if the premium amounts
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Use Worksheet 4 to figure the amounts to report on
changed during the tax year.
lines 4 and 5 of Form 8941.
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State Premium Subsidy and Tax Credit
Use Worksheets 5, 6, and 7 if you need to figure
amounts to report on lines 8, 9, and 14 of Form 8941.
Limitation
Line 1
Your credit may be reduced if you are entitled to a state
tax credit or a state premium subsidy for the cost of
Enter the total number of individuals considered
health insurance coverage you provide under a qualifying
employees shown in column (a) of Worksheet 1. For
arrangement to individuals considered employees. The
details, see Individuals Considered Employees on page
state tax credit may be refundable or nonrefundable and
2.
the state premium subsidy may be paid to you or directly
Instructions for Worksheet 1
to your insurance provider.
Although a state tax credit or premium subsidy paid
Column (a). Enter the name or other identifying
directly to you does not reduce the amount of your
information for all individuals considered employees for
employer premiums paid, and although a state premium
purposes of this credit. For details, see Individuals
subsidy paid directly to an insurance provider is treated
Considered Employees on page 2.
as an employer premium you paid, the amount of your
Column (b). Enter the total hours of service for the tax
credit cannot be more than your net premium payments.
year for each employee listed in column (a). Do not enter
Net premium payments are employer premiums paid
more than 2,080 hours for any employee. But enter -0-
(discussed earlier) minus the amount of any state tax
for seasonal employees who worked 120 or fewer days
credits you received or will receive and any state
during the tax year. The information in this column is
premium subsides paid either to you or directly to your
used to figure your number of full-time equivalent
insurance provider for premiums for health insurance
employees on Worksheet 2. For details, see FTE
coverage you provide under a qualifying arrangement to
Limitation on page 2.
individuals considered employees.
Complete Worksheet 2 before you complete
Payroll Tax Limitation for Tax-Exempt Small
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column (c). Do not complete column (c) if
Employers
Worksheet 2, line 3, is 25 or more.
CAUTION
The credit for tax-exempt small employers cannot exceed
Column (c). Enter the total wages paid for the tax year
the amount of certain payroll taxes. For tax years
for each employee listed in column (a). But enter -0- for
beginning in 2010, payroll taxes, for this purpose, mean
seasonal employees who worked 120 or fewer days
only the following taxes.
during the tax year. The information in this column is
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Federal income taxes the tax-exempt employer was
used to figure your average annual wages on Worksheet
required to withhold from employees’ wages in calendar
3. For details, see Average Annual Wage Limitation on
year 2010.
page 2.
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