Filing deadlines are approaching for the small business health care tax credit that was included in PPACA last year in which small employers who pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for credit. There are two significant tax filing deadlines coming up for small businesses that requested an extension to file their taxes.

In general, businesses are eligible for the credit if they have fewer than 25 full-time employees with annual average wages below $50,000 and pay at least 50 percent of their employees' health insurance premiums. The IRS and HHS issued an outreach campaign this month to help employers understand the features and benefits of the credit, and provide notice on the following deadlines:

• September 15 (deadline has passed). Corporations that file on a calendar year basis and requested an extension to file to September 15 can calculate the small employer health care credit on Form 8941 and claim it as part of the general business credit on Form 3800, which they would include with their corporate income tax return.
• October 17. Sole proprietors who file Form 1040 and partners and S-corporation shareholders who report their income on Form 1040 have until October 17 to complete their returns. They would also use Form 8941 to calculate the small employer health care credit and claim it as a general business credit on Form 3800, reflected on line 53 of Form 1040.
• November 15. In addition, tax-exempt organizations that file on a calendar year basis and requested an extension to file can use Form 8941 and then claim the credit on Form 990-T, Line 44f.

However, businesses that have already filed can still claim the credit. For small businesses that have already filed and later determine they are eligible for the credit, they can always file an amended 2010 tax return. Corporations use Form 1120X and individual sole proprietors use Form 1040X.

Businesses that couldn't use the credit in 2010 can claim it in future years. Some businesses that already locked into health insurance plan structures and contributions for 2010 may not have had the opportunity to make any needed adjustments to qualify for the credit for 2010. So these businesses may be eligible to claim the credit on 2011 returns or in years beyond. Small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.

Click here for more information on the health care tax credit for small businesses.