Discussion:Small Business Health Care Tax Credit Wife Employee

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Tax Questions --> Small Business Health Care Tax Credit Wife Employee

Okcnhra (talk|edits) said:

2 April 2010
In reading the recent IRS Enews FAQ portion for the Health Care Tax Credit, questions #13 and 14 seem to have left open the owner's wife as a legitmate employee if she is not a part of the owner's household.

16:24, 2 April 2010 (CDT)16:24, 2 April 2010 (CDT)~~ 13. If an owner of a business also provides services to it, does the owner count as an employee?

A. Generally, no. A sole proprietor, a partner in a partnership, a shareholder owning more than two percent of an S corporation, and any owner of more than five percent of other businesses are not considered employees for purposes of the credit.

14. Do family members of a business owner who work for the business count as employees?

A. Generally, no. A family member of any of the business owners or partners listed in Q/A-13, or a member of such a business owner’s or partner’s household, is not considered an employee for purposes of the credit

For this purpose, a family member is defined as a child (or descendant of a child); a sibling or step-sibling; a parent (or ancestor of a parent); a step-parent; a niece or nephew; an aunt or uncle; or a son-in-law, daughter- in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.

16:24, 2 April 2010 (CDT)16:24, 2 April 2010 (CDT)16:24, 2 April 2010 (CDT)

So, if a wife is a legitmate employee and not a member of the owner's household, then the wife's premium's (which include the owner as a spouse) could be claimed?

$18,000 of premiums offset with $6,300 worth of credits tend to make you think twice.

Once again though, it appears that Congress believes that small family business does not need any tax breaks.

CrowJD (talk|edits) said:

2 April 2010
It's easy to miss the real outrage though. I want to know how Congress believes the American people can afford $18,000.00 in medical insurance premiums?

Let me itemize how the premium dollars break down:

$8,000.00 for mansions, caviar, and lobster for insurance co executives

$8,000.00 for mansions, caviar, and lobster for drug company executives

$1,000.00 for private planes to fly hospital administrators to Vegas

$1,000.00 left to care for the miserable patient.

Yep, that's about right. That's what lobbying will do for you.

Natalie (talk|edits) said:

April 2, 2010
I simply haven't had the time to get into the details of this new law. Are you saying, Okcnhra, that shareholders who are employees do not get a credit? If that's the case, what about sole proprietors? Is there anything in this bill for people who are self employed or employed by their own corporations?

LMR (talk|edits) said:

13 May 2010
Per the wording, sole proprietors are also excluded.

R2 (talk|edits) said:

13 May 2010
Under Sections 45R, 416, and 318, the wife would be treated as a 5% owner. 5% owners are not eligible for the credit.

Taxguy1024 (talk|edits) said:

14 May 2010
Owners and their spouses, parents, siblings, and all of their children are ineligible employees for purposes of the credit.

Illini (talk|edits) said:

20 May 2010
This is great information - I fail to see why the government would discriminate against small business owners and their family members. The lack of group benefits purcahsing power that larger corporations enjoy is an unfair advantage. That's why, IMO, this bill stinks because it is meddling with huge economic forces and does so with great intentions but disastrous results.

JR1 (talk|edits) said:

May 20, 2010
Well, what do you expect? No one read the dam*ed thing. Much less actually talked about it other than to blow each other up.

EasternPA (talk|edits) said:

20 May 2010
Where's all this health insurance money go?

Let's start from the top:

A. The first $10,000,000 goes to pay the salary of the CEO. That's 600 family policies. There's 30 major health insurers, United Health, High Mark, Blue Cross.... So that's $300,000,000, plus bonus and golden parachutes...

B. The CFO gets the next $2,000,0000 per company. So the next $60,000,000 goes to them.

C. The VP of marketing gets $1,000,000 per company, so there goes the next $30,000,000.

D. The head lobbyist gets $4,000,000 plus perks...


Z. There are para-legal nay-sayers to deny claims. They are so poorly trained in contract law (or casting bones on the meaning of your policy) that one can never get the same answer twice. There are 5,000 per company and are paid 2 policies per year. That's $180,000,000 per company or about $5.4 Billion.

AA. The fax shredders are highly trained in the Eeney-Meeney-Miney-Moe selection methodology to assure that no application is ever complete. Alas, an incomplete application can not be processed. Next.

Kathyt (talk|edits) said:

20 May 2010
I attended a webinar yesterday from PPC Thompson Reuters and the speaker said in his opinion spouses would not be excluded as related. I haven't had time to actually read up on any of this myself though.

Natalie (talk|edits) said:

May 20, 2010
The CEO of our biggest health care provider makes about $1M per year, and it's a nonprofit organization.

Illini (talk|edits) said:

20 May 2010
Don't get me started on SALARIES; Emergency Room inflated prices; Diagnostic Test inflation; Drug inflation -- all because of decades of LOW deductibles and employer provided "Cadillac" plans. Now no one (or very few) have Cadillac plans and the deductibles are out of sight. Layer on top of that the comments by EasternPA AND AGING DEMOGRAPHICS and the system is WAYYYYY over-stressed.

It will seek it's "own level" just like water, but government tinkering only pushes the problem around to different corners of the room. If you're in the wrong corner - too bad, you get scr---d.

It doesn't look good for us self-employed stiffs for at least another 4 or 5 years until the government realizes they have created a monster that will eat small businesses for breakfast.

Fsteincpa (talk|edits) said:

29 December 2010
So, how have we been presenting this to our clients?

Actionbsns (talk|edits) said:

29 December 2010
So far, I only have two or three clients who will see any benefit from this because most of my business clients are small "mom and pop" operations. Mom and Pop have been specifically excluded.

Fsteincpa (talk|edits) said:

29 December 2010
Yes they have. We do have some employers who do not offer health insurance, but I am going to send them a letter. Maybe they will now decide to offer it.

Waynecpa (talk|edits) said:

29 December 2010
IRS Notice 2010-82 [1] addresses the spouse issue - not considered an employee.

To join in on this discussion, you must first log in.
Personal tools