Are You Eligible for a Healthcare Credit?

Refundable Healthcare Credit:

This year many American churches were eligible to receive cash refunds of up to 25% of their healthcare premiums from the Federal Government.

But only 5% of all eligible organizations filed claims to recover the refundable “Small Business Healthcare Credit”, according to a Treasury Department report issued in early November.

It represents a lost opportunity to put Pharaoh’s gold to Kingdom purposes. But all is not lost.

Refunds are available for the next four years.

Background

Provisions to encourage small organizations to provide healthcare for their employees were included in the Patient Protection and Affordable Care Act (PPACA), signed into law by President Obama in March 2010.

Congress was intentional that not-for-profits should benefit from this these provisions by providing refunds from the US Treasury equal to 25% of healthcare premiums paid on behalf of their employees.

In specifically addressing churches, the regulations said that premiums paid on behalf of Pastors (who are self-employed individuals for Social Security tax purposes) are to be treated as employee premiums for purposes of calculating the refund.

Limitations on the size of the refund are introduced as the number of employees approaches 25 and as average salaries approach $50,000.

However, Congress carved-out another Pastoral exception. 100% of Pastoral compensation is to be excluded from the average salary calculations – as though the Pastors were self-employed.

Clearly Congress set this up for churches to receive big refunds from the Federal coffers, by letting them “have their (Pastoral) cake and eating it, too”.

But American churches joined most American organizations in not applying for the money Congress intended for them.

The Good News – The IRS wants Churches to receive this money. During 2011 my colleagues and I have helped to recover cash refunds for churches totaling over $200,000, money that IRS Commissioner Doug Shulman wants churches and small businesses to claim.

“We want to make sure that small business owners don’t leave any money on the table,” Shulman says. “Small businesses that offer health insurance should learn about this healthcare credit and claim it if they are eligible.”

Obtaining the Healthcare Refund for churches is accomplished by filing a form 990T with an accompanying form 8941.

The deadline for filing for the healthcare credit for year 2011 for a church with a December fiscal year is May 15, 2012.

Care needs to be given to supply the proper inscriptions on the forms as prescribed in the IRS directions to avoid having IRS mistake the filing as a UBIT filing.

He has also served as a Deacon and Elder of the churches where he has been a member. He started his firm with the vision of providing practical financial wisdom to ministries of Jesus Christ.

Since its founding, Wisdom Over Wealth has served Christian ministries on four continents in activities ranging from water drilling in Africa, to some of the largest churches in the developing world, and a local Christian Counseling Organization.

Wisdom currently serves as the principal service provider to a Christian international loan fund.

“Wisdom over Wealth” is the CPA practice Bill established many years ago. At its heart it's a Christian ministry providing stewardship services to Christian organizations, especially local churches.”

They offer a offer a better and cheaper process than church audits and do tax prep for clergy.

The vision and calling of Wisdom Over Wealth is to provide practical and Biblical financial wisdom to Christian churches, their leaders and the lay followers of Jesus Christ.

Go to Nonprofit and Church Accounting from Healthcare Credit