HHS Releases Average Health Insurance Premiums For Determining Health Insurance Tax Credit
The Department of Health and Human Services [HHS] has released the amounts below, which are non-elective employer contributions for employee health insurance premiums in order to serve as the amount for computing the 35% tax credit under Internal Revenue Code Section [IRC] 45R of the newly enacted Patient Protection and Affordable Care Act.
The credit is part of IRC Section 38, which is the general business credit. Small businesses are defined as those with 25 or less employees and in which average annual wages are less than $50,000. [IRC § 45R(d)(1), (d)(3)(B)] If the amount of non-elective contributions paid by an employer is less than the HHS amounts above, then the credit is computed based upon the lesser amount. Also, the employer must have a contribution arrangement in effect. [IRC § 45R(d)(1), (4)]
Employers with 10 or less employees and average wages of less than $20,000 are entitled to receive 100% of the credit. The credit begins to be reduced for an employer with 10 employees and is completely phased out at the 25-employee level, and the credit will be available for tax years beginning January 1, 2011.
The credit under the new law offers an incentive to small businesses by essentially subsidizing employee coverage by way of the tax credit for purchasing health insurance. Read more on the Patient Protection and Affordable Care Act here at webtaxcpa.
Employee-only / Family Coverage
Alaska $6,204 / $13,723
Alabama $4,441 / $11,275
Arkansas $4,329 / $9,677
Arizona $4,495 / $10,239
California $4,628 / $10,957
Colorado $4,972 / $11,437
Connecticut $5,419 / $13,484
District of Columbia $5,355 / $12,823
Delaware $5,602 / $12,513
Florida $5,161 / $12,453
Georgia $4,612 / $10,598
Hawaii $4,228 / $10,508
Iowa $4,652 / $10,503
Idaho $4,215 / $9,365
Illinois $5,198 / $12,309
Indiana $4,775 / $11,222
Kansas $4,603 / $11,462
Kentucky $4,287 / $10,434
Louisiana $4,829 / $11,074
Massachusetts $5,700 / $14,138
Maryland $4,837 / $11,939
Maine $5,215 / $11,887
Michigan $5,098 / $12,364
Minnesota $4,704 / $11,938
Missouri $4,663 / $10,681
Mississippi $4,533 / $10,501
Montana $4,772 / $10,212
North Carolina $4,920 / $11,583
North Dakota $4,469 / $10,506
Nebraska $4,715 / $11,169
New Hampshire $5,519 / $13,624
New Jersey $5,607 / $13,521
New Mexico $4,754 / $11,404
Nevada $4,553 / $10,297
New York $5,442 / $12,867
Ohio $4,667 / $11,293
Oklahoma $4,838 / $11,002
Oregon $4,681 / $10,890
Pennsylvania $5,039 / $12,471
Rhode Island $5,887 / $13,786
South Carolina $4,899 / $11,780
South Dakota $4,497 / $11,483
Tennessee $4,611 / $10,369
Texas $5,140 / $11,972
Utah $4,238 / $10,935
Virginia $4,890 / $11,338

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