Instructions For Form 8941 - Credit For Small Employer Health Insurance Premiums - 2016 Page 4
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30composite rate (defined below) for your family coverage,
beginning in 2017, payroll taxes, for this purpose, mean
for each employee (if any) enrolled in family coverage.
only the following taxes.
A uniform amount that is either equal to the amount you
Federal income taxes the tax-exempt employer was
would have paid toward employee-only coverage (as
required to withhold from employees' wages in calendar
discussed above), a uniform percentage (not less than
year 2017.
50%) of the premium charged, or a uniform percentage
Medicare taxes the tax-exempt employer was required
(not less than 50%) of your employer-computed
to withhold from employees' wages in calendar year 2017.
composite rate (defined below) for any other tier of
Medicare taxes the tax-exempt employer was required
coverage, for each employee (if any) enrolled in any other
to pay for calendar year 2017.
tier of coverage (figured separately for each tier).
Premium Deduction Reduced
Employer-computed composite rate. The
You must reduce your deduction for the cost of providing
employer-computed composite rate for a tier of coverage
health insurance coverage to your employees by the
is the average rate determined by adding the premiums
amount of any credit for small employer health insurance
for that tier of coverage for all employees eligible to
premiums allowed with respect to the coverage.
participate in the health insurance plan (whether or not
More Information
they actually receive coverage under the plan or under
that tier of coverage) and dividing by the total number of
For more information about this credit, see the following.
such eligible employees.
Section 45R.
More than one plan. Different types of health insurance
Regulations sections 1.45R-0 through 1.45R-5.
plans are generally not aggregated for purposes of
IRS.gov/Affordable-Care-Act/Employers/Small-
meeting the qualifying arrangement requirement. For
Business-Health-Care-Tax-Credit-and-the-SHOP-
example, if you offer a major medical insurance plan and a
Marketplace.
stand-alone vision plan, you generally must separately
Specific Instructions
satisfy the requirements for a qualifying arrangement with
respect to each type of coverage. For exceptions, see
Regulations section 1.45R-4(c).
Partnerships, S corporations, cooperatives,
estates, trusts, and tax-exempt eligible small
State subsidies and credits. For this purpose, if you
TIP
employers must file this form to claim the credit.
are entitled to a state tax credit or a state premium
All other taxpayers must not complete or file this form if
subsidy paid directly to you for premiums you paid, don’t
their only source for this credit is a partnership, S
reduce the amount you paid by the credit or subsidy
corporation, cooperative, estate, or trust. Instead, they
amount. Also, if a state pays a premium subsidy directly to
must report this credit directly on line 4h in Part III of Form
your insurance provider, treat the subsidy amount as an
3800.
amount you paid for employee health insurance coverage.
State Premium Subsidy and Tax
Use Worksheets 1 through 7 to figure the amounts to
Credit Limitation
report on various lines of Form 8941.
Use Worksheets 1, 2, and 3 to figure the amounts to
Your credit may be reduced if you are entitled to a state
report on lines 1, 2, and 3 of Form 8941.
tax credit or a state premium subsidy for the cost of health
Use Worksheet 4 to figure the amounts to report on
insurance coverage you provide under a qualifying
lines 4, 5, and 13 of Form 8941.
arrangement to individuals considered employees. The
Use Worksheets 5, 6, and 7 to figure the amounts to
state tax credit may be refundable or nonrefundable and
report on lines 8, 9, and 14 of Form 8941.
the state premium subsidy may be paid to you or directly
Line A
to your insurance provider.
Although a state tax credit or premium subsidy paid
Answer "Yes" if one of the following applies.
directly to you doesn’t reduce the amount of your
You paid premiums for employee health insurance
employer premiums paid, and although a state premium
coverage you provided through a SHOP Marketplace or
subsidy paid directly to an insurance provider is treated as
through a direct enrollment process, if available in your
an employer premium you paid, the amount of your credit
state.
can’t be more than your net premium payments.
You qualify for an exception to this requirement as
discussed below.
Net premium payments are employer premiums paid
(discussed earlier) minus the amount of any state tax
If you answer "Yes" because you paid premiums for
credits you received or will receive and any state premium
employee health insurance coverage you provided
subsidies paid either to you or directly to your insurance
through a SHOP Marketplace, enter the Marketplace
provider for premiums for health insurance coverage you
identifier, if any.
provide under a qualifying arrangement to individuals
considered employees.
If you answer "No," don’t file Form 8941 unless you are
Payroll Tax Limitation for Tax-Exempt
filing it for a partnership, S corporation, cooperative,
estate, trust, or tax-exempt eligible small employer that
Eligible Small Employers
received from another entity a credit that must be reported
The credit for tax-exempt eligible small employers can’t
on line 15. For more information, see the instructions for
exceed the amount of certain payroll taxes. For tax years
line 15.
-4-
Instructions for Form 8941 (2017)
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