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IRS Releases Form to Help Small Businesses Claim New Health Care Tax Credit

IRS Also Announces How Tax-Exempt Organizations Will Claim Credit

IR-2010-96 Sept. 7, 2010

WASHINGTON –– The Internal Revenue Service today released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible tax-exempt organizations –– which do not generally file income tax returns –– will claim the credit during the 2011 filing season.

The IRS has posted a draft of Form 8941 on Both small businesses and tax-exempt organizations will use the form to calculate the credit. A small business will then include the amount of the credit as part of the general business credit on its income tax return.

Tax-exempt organizations will instead claim the small business health care tax credit on a revised Form 990-T. The Form 990-T is currently used by tax-exempt organizations to report and pay the tax on unrelated business income. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations –– even those that owe no tax on unrelated business income –– also to claim the small business health care tax credit.

The final version of Form 8941 and its instructions will be available later this year.

The small business health care tax credit was included in the Affordable Care Act signed by the President in March and is effective this year. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

In 2010, the credit is generally available to small employers that contribute an amount equivalent to at least half the cost of single coverage towards buying health insurance for their employees. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.

For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. Beginning in 2014, the maximum tax credit will go up to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible, tax-exempt organizations for two years. The maximum credit goes to smaller employers ­­–– those with 10 or fewer full-time equivalent (FTE) employees ––­­ paying annual average wages of $25,000 or less.

The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more. Because the eligibility rules are based in part on the number of FTEs, and not simply the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals.

More information about the credit, including a step-by-step guide and answers to frequently asked questions, is available on the Affordable Care Act page on the IRS website.

IRS Announcements

New Online Registration System for Paid Tax Return Preparers Is Now Available

Additional Information from
Filomena Trujillo-Mealy, Sr. Stakeholder Liaison

Dear Practitioner:

A Few moments ago, I issued a Press Release announcing that the PTIN Registration Database is now available. I also indicated the importance of reading the Press Release and all the attachments because there is a great deal of information. For example, if you encounter any difficulty with the database then you should contact the the PTIN Helpline at 1-877-613-PTIN (7846) as the release indicates.

In addition, the Press Release also has a link to updated FAQs, that you should review before completing the process explaining how a prior PTIN can be reissued based on whether a match is located during the authentication process.

Finally, I also included a couple of other attachments, alerting you to the fact that as part of the IRS outreach effort, a letter is being sent to the 1 million or more preparers who currently have a PTIN. A copy of this letter and the attached brochure will be part of the mailing that will be staggered over an eight week period beginning beginning 10/13 and ending 12/1.

Finally, I encourage you you to use the PTIN hotline with your inquiries because those employees have been trained to handle those types of inquiries.


the Elimination of Paper Coupons for FTD Deposits

Letter from your Stakeholder Liaison Area Manager, Brian Finn

Dear New Jersey Tax Practitioner,

As the IRS Stakeholder Liaison (SL) Area Manager for New Jersey, I want to thank you for your past support and ask for your continued partnership with me and your local Stakeholder Liaisons. SL is proud to be in our fifth year as the practitioners’ gateway to the IRS. We have had a busy year, holding practitioner events, conducting National Phone Forums and webinars, and establishing Web-based tax centers. Our local SLs have received thousands of phone calls from practitioners with suggestions on how to improve IRS systems. This partnership strengthens our mutual commitment to ensuring taxpayer compliance with federal tax responsibilities.

SL is committed to getting you the information you need. While we do not answer tax law questions or have access to your clients’ tax accounts, we can steer you in the right direction.

How SL can help you navigate the IRS

The best way to stay up to date with what is happening at the IRS is to use our free products and services. Subscribe to e-News for Tax Professionals for weekly news briefs. Check out Tax Hints, and Key Messages for Tax Professionals. We offer practitioner “tax centers” that link from your organization’s Web site to ours, making it easy to find frequently-used Web pages. Join our free, educational National Phone Forums and webinars from the convenience of your office. And be assured that has more than just forms and publications. You will find the latest news, online tools, research services, guidance and contact information. Check out our new Tax Practitioner Video and Audio Presentations page, and visit’s Spanish counterpart IRS en Español for translated information.

How you can help your clients and colleagues

Tell us when you see a problem or have a suggestion to improve our processes. We introduced the Issue Management Resolution System four years ago and have had more than a thousand IMRS issues submitted. Check out some of the successes in our IMRS report on

Help us find ways to further our partnership. Work with us in reaching more practitioners through joint events or webinars. Include IRS information in your newsletter and Web site. Post a tax center on your Web site. Volunteer to teach a Small Business Tax Workshop in your community. Share what you learn with your colleagues.

And stay in touch with your local SL. If you need assistance in New Jersey, contact one of the Stakeholder Liaison employees below.

Glenn Gizzi
Phone: 732-777-7269
Fax: 732-777-7229
Bryan Coffey
Phone: 732-777-7242
Fax: 732-777-7229
Todd Cresci
Phone: 856-414-6771
Fax: 856-414-6472

You may also contact me, Brian M. Finn, Mid-Atlantic Area Manager for Stakeholder Liaison, at 215-861-1332 or .

Filing season can be a challenging and stressful time. Together, we can make it easier. Use our free tools, products, and services, and raise your issues and concerns through your local Stakeholder Liaison.


Stakeholder Liaison Area Manager, Mid-Atlantic Area

Practitioner IRS Contact List

New IRS Regulations - Return Preparer Review
Fact Sheet FS-2010-1 - Return Preparer Review
Fact Sheet FS-2010-2 - 2010 Efforts