Instructions For Form 8941 - Credit For Small Employer Health Insurance Premiums - 2016 Page 2
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30Employers treated as a single employer. Treat the
Wellness programs. A wellness program is generally an
following employers as a single employer to figure the
insurance program of health promotion or disease
credit.
prevention. If you pay part or all of the cost of an
Employers who are corporations in a controlled group
employee's participation in a wellness program, use the
of corporations.
amount you paid to figure your employer premiums paid.
Employers who are members of an affiliated service
Tobacco surcharges. A tobacco surcharge is generally
group.
an additional amount charged for insurance for a tobacco
Employers who are partnerships, proprietorships, etc.,
user. If you pay part or all of an employee's tobacco
under common control. See Regulations sections
surcharge, you can’t use the amount you paid to figure
1.414(c)-2, 1.414(c)-3, and 1.414(c)-4.
your employer premiums paid.
Tax-exempt employers under common control. See
Dependent coverage. Dependent coverage is generally
Regulations section 1.414(c)-5.
coverage offered separately to an individual who is or may
For details, see section 45R(e)(5)(A) and Regulations
become eligible for coverage under the terms of a group
section 1.45R-2(b).
health plan because of a relationship to a
No more than one Form 8941 can be filed with a
participant-employee, whether or not a dependent of the
tax return, unless the exception described in
participant-employee. Dependent coverage doesn’t
TIP
Example 2 below applies.
include coverage, such as family coverage, which
includes coverage of the participant-employee. If you pay
Example 1. You are a sole proprietor with two
part or all of the cost of an employee's dependent
separate businesses and you file a separate Schedule C
coverage, use the amount you paid to figure your
(Form 1040) for each business. You must treat both
employer premiums paid.
businesses as a single employer to figure the credit. You
Portion of premiums paid. If you pay only a portion of
will file one Form 8941 for both businesses.
the premiums and your employees pay the rest, only the
Example 2. You and your spouse are both sole
portion you pay is taken into account. For this purpose,
proprietors and file a separate Schedule C (Form 1040)
any premium paid through a salary reduction arrangement
for each of your separate businesses. Neither spouse was
under a section 125 cafeteria plan isn’t treated as an
an employee of the other spouse or participated in the
employer paid premium. For more information on cafeteria
management of the other spouse's business at any time
plans, see section 1 of Pub. 15-B, Employer's Tax Guide
during the tax year. No more than 50% of the gross
to Fringe Benefits.
income of either business was derived from royalties,
Example 3. You offer health insurance coverage to
rents, dividends, interest, and annuities and you otherwise
employees under a qualifying arrangement that requires
meet the requirements listed in Regulations section
you to pay 60% of the premium cost for employee-only
1.414(c)-4(b)(5)(ii). Don’t treat both businesses as a
coverage for each employee enrolled in any health
single employer to figure the credit. If you and your
insurance coverage you provide to employees. The total
spouse are both eligible small employers, you can file two
premium for each employee enrolled in employee-only
Forms 8941 with a jointly filed Form 1040.
coverage is $5,200 per year or $100 ($5,200 ÷ 52) for
Credit Period
each weekly payday. The total premium for each
employee enrolled in family coverage is $13,000 per year
For tax years beginning after 2013, the credit period
or $250 ($13,000 ÷ 52) for each weekly payday.
during which the credit can be claimed is a
2-consecutive-tax-year period beginning with the first tax
Each payday you contribute $60 (60% of $100) toward
year in which:
the premium cost of each employee enrolled in
An eligible small employer (or any predecessor) files an
employee-only coverage and withhold the remaining $40
income tax return with an attached Form 8941 with line A
from the employee's paycheck to obtain the $100 total
checked “Yes” and a positive amount on line 12, or
weekly premium. Each payday you contribute $60 (the
A tax-exempt eligible small employer (or any
same amount you pay toward the premiums of employees
predecessor) files Form 990-T with an attached Form
enrolled in employee-only coverage) toward the premium
8941 with line A checked “Yes” and a positive amount on
cost of each employee enrolled in family coverage and
line 12.
withhold the remaining $190 from the employee's
paycheck to obtain the $250 total weekly premium.
Employer Premiums Paid
To determine the premiums you paid during the tax
Only premiums you paid for health insurance coverage
year, multiply the number of pay periods during which the
under a qualifying arrangement (discussed later) for
employee was enrolled in the health insurance coverage
individuals considered employees are counted when
by $60. For example, you would have paid $3,120 ($60 ×
figuring your credit.
52) for an employee who was enrolled for the entire tax
State premium subsidy or tax credit. If you are entitled
year. You would have paid $600 ($60 × 10) for an
to a state tax credit or a state premium subsidy paid
employee who was only enrolled for 10 pay periods. You
directly to you for premiums you paid, don’t reduce the
will need an additional set of calculations if the premium
amount you paid by the credit or subsidy amount. Also, if
amounts changed during the tax year.
a state pays a premium subsidy directly to your insurance
provider, treat the subsidy amount as an amount you paid
for employee health insurance coverage.
-2-
Instructions for Form 8941 (2017)
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