The Affordable Care Act was passed in 2010 and created a tax credit called the Small Business Health Care Tax Credit for Small Employers. This credit helps subsidize the cost of employer-provided healthcare insurance for the employees of small businesses, including churches.
As you are aware, churches are non-profit but are not required to file a Form 990 tax return. Because of this many churches have missed this valuable credit which could be as high as 25% of the health insurance expense you pay on behalf of your employees.
There are a few requirements to qualify for this credit:
1. You must have less than 25 employees.
2. The church must pay for more than half of at least one employee’s insurance.
3. The church must be a 501 (c) not for profit organization.
Here is an example: A church has 9 employees and their average annual wage is $30,000. During the year the church provided health insurance for 3 of these FTEs at a cost of $18,000 ($6000 for each FTE). The tax credit due to this church would be 20% or $3,600.
As you can see this is substantial. Additionally we can file for this credit all the way back to 2011. That would be more than $10,000 in this example. (Please note the 2011 credit must be filed before 12/31/2014)