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Tax Credit Cash in Your Old Tax Returns

Although the passage of time has brought new rules about the Small Employer Health Insurance Tax Credit under the ACA (Affordable Care Act), there are still tax returns that may need amending even if you don’t qualify for the tax credit this year. The 2010 Tax return amending period is now over, but tax returns from 2011-2013 may be hiding a pile of cash for you and your business.

Even if you actually claimed the tax credit on those tax returns, there’s still hope for finding a hidden gem. There were actually three (yes 3) different ways to calculate the tax credit and the taxpayer could calculate it all three ways then pick the best one. I have seen more than one tax return where the credit was either missed altogether or clearly not optimized in any meaningful way.

Generally, clues that there may be an optimization available include:

  1. Your workforce includes non-seasonal, part-time workers
  2. Full-time equivalents on the Form 8941 worksheet are less than 10 (usually the lower the better)
  3. Average annual wages on the Form 8941 are over $25,000 (the closer this is to $50,000, the more difference optimization may make)

This list is far from definitive or exhaustive, but it’s a good reason to start asking more questions. If you think that your tax credit has not been properly optimized, get to your tax return professional (or someone more mathematically qualified) before January to see if they can uncover some cash before a busy tax filing season.

Shane Eloe About Shane Eloe

Shane has 12 years of experience in public practice and specializes in working with agriculture and construction businesses. If you have questions for Shane, please send him an email. To see his latest posts click here. Click here to connect with Shane on LinkedIn.

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