Hawaii nonprofits may get health insurance tax credits

Under the recently signed health care reform act, Hawaii nonprofit organizations and small businesses may qualify for tax credits. The Internal Revenue Service is mailing postcards to alert organizations that may be eligible to the credits, which can amount to as much as 35 percent of health plan premiums small businesses pay for workers. For nonprofits the maximum credit is 25 percent.

The IRS says at least 18,500 small businesses and nonprofits in Hawaii may benefit from the tax credits, which take effect for the 2010 tax year and were enacted to encourage small employers to offer health insurance to workers. The IRS began mailing a total of more than 4 million postcards this week.

"We want to make sure small employers across the nation realize that — effective this tax year — they may be eligible for a valuable new tax credit," said IRS Commissioner Doug Shulman. "We urge every small employer to take advantage of this credit if they qualify."

The postcards direct employers to http://IRS.gov to learn more about qualifying for the tax credit. To take advantage, employers must meet requirements, including having fewer than 25 full-time workers that make average annual wages of less than $50,000. They must also pay at least half the health care premium.

For-profit businesses employing 10 or fewer full-time workers qualify for the maximum credit of 35 percent. If an employer has more than 10 full-time workers or if they have average annual wages of more than $25,000, the credit is reduced.