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Desktop: Form 8941 - Credit for Small Employer Health Insurance Premiums

Eligible small employers can use Form 8941 to figure the credit for small employer health insurance premiums. The maximum credit is based on a percentage of premiums that the employer paid during the tax year for certain insurance coverage.

The maximum credit is 50% of the premiums paid, with the exception of tax-exempt small employers being allowed a credit of 35% of premiums paid.

A small employer must meet the following three requirements to be eligible to claim the credit:

  • Paid premiums for employee health insurance coverage under a qualifying arrangement.
  • Had fewer than 25 full-time equivalent employees for the tax year.
  • Paid annual average wages for the tax year of less than $56,000 per full-time equivalent employee.

In an S-Corporation Tax Return (Form 1120-S)

To complete Form 8941 in the S corporation return (Form 1120-S) select:

  • Schedule K - Distributive Share Items
  • Credits
  • General Business Credits
  • Current Year General Business Credits
  • Form 8941 - Credit for Small Employer Health Insurance Premiums

In a Partnership Tax Return (Form 1065)

To complete Form 8941 in the partnership return (Form 1065) select:

  • Schedule K - Distributive Share Items
  • Credits & Credit Recapture
  • General Business Credits
  • Current Year General Business Credits
  • Form 8941 - Credit for Small Employer Health Insurance Premiums

In an Individual Tax Return (Form 1040)

In the individual tax return, you won't need to complete the entire form if the credit is being passed through to the taxpayer on Schedule K-1.

To complete Form 8941 in the individual tax return (Form 1040) select:

  • Credits
  • General Business Credit (3800)
  • Current Year General Business Credits
  • Forms 8941 (Employer Health Insurance) - Select YES to the initial question regarding paying premiums or qualifying for an exception, then enter the Marketplace Identifier and the business's EIN. (Once in the Form 8941 Menu, if the only credit in the return is from a passthrough entity, select Credit from Pass-Through Entities and enter the information from Schedule K-1.)

Note: This is a brief guide to entering Form 8941 into the TaxSlayer Pro program. This is not intended as tax advice.