Hiring Incentive to Restore Employment (HIRE) Act March 25, 2010Posted by solutionsinsuranceservices in Human Resources.
Tags: hire act, payroll tax savings
The HIRE Act was signed into law on March 18th. This law is intended to stimulate new job creation by offering a Section 101 Payroll Tax Exemption to employers.
Between March 19, 2010 and December 31, 2010, all wages for a qualified employee will be exempt from the 6.2% Employer share of Social Security tax. A qualified employee is defined as 1) An employee hired between Feb 3, 2010 and Dec 31, 2010. 2) An employee who prior to beginning employment was previously unemployed or employed less than 40 hours in the prior 60 days and 3) Can’t be related to the employer. The IRS is allowing employers to reduce deposits by the amount of the exemption starting in 2nd Qtr.
An employer can elect out of the exemption and elect to pay the tax. Employees must sign an affidavit under the penalties and perjury law. A sample affidavit form will be available on the IRS WEB site for employers to use – it will be retained by employers and not submitted to the IRS.
If a qualified employee is retained for 52 weeks then the company is eligible for an additional tax credit. This is designed to promote retention of the hired employees. To qualify for the additional credit the company must not only retain the employee for 52 weeks but also, in the last 26 weeks of the 52 week retention period, the employee must earn at least 80% of the amount of wages they earned in the first 26 weeks of the 52 week period. The additional credit is the Employer portion of the Social Security tax paid on the qualified employee’s wages with a max of $1000.00. The credit can be taken on the employer’s 2011 Income Tax Return
Small Business Tax Credits March 24, 2010Posted by solutionsinsuranceservices in Uncategorized.
Tags: Group Insurance, Health Insurance, healthcare reform
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Recently, I’ve received a large number of questions regarding the small business tax credits provision in the new healthcare reform law. Trying to put it in simple terms, the law provides small businesses with NO MORE than 25 employees, and an average annual salary of LESS THAN $50,000 that purchase health insurance for employees, a tax credit. In tax years 2010 through 2013, if the employer pays at least 50% of the employee’s premium, or of a benchmark premium, they will receive a tax credit up to 35% of their share of the premium. You may ask, what is a “benchmark premium?” That is a good questions which, of course, has not been defined as of yet. As soon as I get that answer, I will share it with you.
For those employers with fewer than 10 employees and an annual average salary of less than $25,000, they will receive full credit for any premiums paid on behalf of the employee.
The credits phase out as firm size and wages increase. For those tax exempt small businesses that meet the size and salary requirements of the law, they will receive a tax credit of up to 25% of the employer’s contribution toward the employee’s health insurance premiums.
Things change in 2014, and I’ll report on those changes as we get closer.
The healthcare reform timeline – what will happen when! March 22, 2010Posted by solutionsinsuranceservices in Health Insurance.
Tags: healthcare reform, healthcare reform timeline
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So everyone is asking about the healthcare reform bill. What does it mean to me? What does it change? When will it happen?
We have the answers for you when it comes to individual and group insurance.
1. Small business tax credits become effective for businesses with fewer than 25 employees and average annual wages of less than $50,000. It will credit businesses up to 35% of the portion of the premium that they pay. This amount will increase to as much as 50% by 2014. Small business of less than 10 employees with an average salary of less than $25,000 may qualify for a full credit.
2. All children under the age of 27 can stay on their parents health coverage if they do not have a job that provides them health coverage of their own.
3. Prohibition of pre-existing conditions exclusions for children.
4. Creation of a temporary high risk pool to provide coverage to individuals with pre-existing conditions. Those uninsured for at least 6 months will be eligible to enroll in the high risk pool and receive subsidized premiums.
5. Removal of lifetime caps on coverage.
6. Mandate that all new private plans cover checkups and othe preventive services with no co-pays.
1. Drug makers begin paying new fees.
2. Over the Counter drugs are no longer eligible for reimbursement under Healthcare Reimbursement Accounts, Healthcare Savings Accounts for through Flexible Savings Accounts.
Medicare payroll taxes increase for all singles earning $200,000 a year or more and for families earning $250,000 a year or more.
1. Nearly all individuals will be required to carry health care coverage or pay a fine.
2. All businesses with 50 or more employees are required to offer health care benefits.
3. State Healthcare Exchanges open for business.
4. Subsidies to help lower income families will begin.