Michael P. Rudy and Associates - mrcpa.net

Tax Changes for 2010 Return

Small Business Health Care Tax Credit 2010
The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010. The following questions and answers provide information on the credit as it applies for 2010-2013, including information on transition relief for 2010. An enhanced version of the credit will be effective beginning in 2014. The new law, the Patient Protection and Affordable Care Act, was passed by Congress and was signed by President Obama on March 23, 2010.

Visit IRS website for Frequently Asked Questions : www.irs.gov
Q: Does the new health care law require workers to pay income tax on the value of employer-provided health insurance? 
A: No. The value will appear on employees’ W-2 forms for information purposes, but will not be considered taxable income.

FULL ANSWER: False information has been circulating regarding the dollar value (cost of what your company pays for your health insurance) will be considered income and added to your gross pay. That information can be added to the list of false claims about the new health care law. It’s true that the value of employer-paid health insurance will be added as an information item on W-2 forms. But contrary to this widely circulating chain e-mail, it definitely will not be considered taxable income.

Visit IRS website for Frequently Asked Questions : www.irs.gov