December 3, 2010
Good news for families who contribute to their employee’s health insurance premiums! In addition to being a non-taxable form of compensation (no taxes for you or her), the IRS has just announced that most household employers will be eligible to take a tax credit of up to 35% on that expenditure starting with the 2010 tax year.
For example, if you contributed $350 per month to your employee’s health insurance policy, your tax bill would be reduced by $1,470 ($350 x 12 = $4,200 x 35%).
Bottom line: if you're hiring an employee and she has health insurance -- or is considering health insurance -- we strongly advise you to structure your payroll to include employer-paid health insurance. Both of you will save money.
For more information regarding the details in your state, feel free to give us a call.