Small Business Health Care Tax Credit Filing Deadline is May 15


Small credit unions should be aware that the filing deadline to claim a credit for the 2015 tax year Small Business Health Care Tax Credit is May 15.

In December 2010, the Internal Revenue Service (IRS) released guidance on how small employers may be eligible to claim the new small-business health care tax credit starting with the 2010 tax year. The health care tax credit was created as part of the 2010 Affordable Care Act. Since the tax credit was introduced, only a few credit unions have taken advantage of the program.

For those which have filed, the payoff was great.

“Almost $7,000 from the IRS for filling out form 8941,” said Mark Freels, former President and CEO of Teamsters Council #37 Federal Credit Union. “That’s easy money in my book.”

“Credit unions only have to do a few parts of the 990T and fill out Form 8941, and neither form is complex,” reported Debi Keesee, CEO, Spokane Media CU.  “We received $1,100 back from the IRS for less than 45 minutes of time to fill out the forms.  Everyone would consider that well worth the time investment.”

The tax credit is available only to smaller credit unions, and they must meet certain requirements to qualify. First, the credit union must pay premiums for employee health insurance coverage under a qualified plan. Second, the credit union must have fewer than 25 full-time equivalent (FTE) employees for the tax year. And third, the credit union must pay an average of less than $50,000 per FTE.

The current maximum credit of 35 percent of insurance premiums paid will go to credit unions with 10 or fewer FTEs and average annual wages of $25,000 or less. The calculation for the tax credit phases out as the credit union’s FTE count and average salary increase.

Both state and federal credit unions may receive the refundable tax credit, which could mean the IRS sends the credit union a check in the mail. To file a claim for the credit, credit unions must complete the IRS Form 8941 and fill out the revised Form 990-T.

“Based on head counts, over 100 Northwest credit unions may qualify for this tax credit,” said David Curtis, Northwest Credit Union Association (NWCUA) Director of Compliance Services. “And receiving a tax credit could go a long way when you have limited resources.”

Credit unions that think they may be eligible should seek detailed information from their accountants or tax advisors. Credit unions wishing to learn more about this credit should check out the Small Business Health Care Tax Credit: Detailed Analysis that is available in the Tax Issues Channel of InfoSight.  The InfoSight page contains some background on the credit, an easy formula to determine if your credit union is eligible, and links to the various IRS forms.

In addition, more information is available from the IRS regarding the Small Business Health Care Tax Credit for Small Employers.

Question of the Week

How do we set up an UTMA account?

Uniform Transfer to Minor Accounts, or UTMAs, are a type of custodial account established through a formal court order or through a designation on an account card.

To set up this type of account, you will want to:

Set up the account as an individual account with an UTMA designation. It is an individual account because only the custodian has access to the funds in the account, but the UTMA designation is important since the funds are held for the benefit of the minor. In the space on the account card after “UTMA” where it says “as custodian for ___,” put the child’s name. Next, put the child’s TIN number after the word “TIN.” Report dividends under the child’s TIN number.

If members have specific questions about what they are able to do with this type of account, they need to consult their own attorneys to learn more about this law. For instance, if members want to know whether they really have to turn the money over to the child when the child reaches a certain age, they will need to contact their attorney.

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Federal Reserve Board (FRB)

The FRB released its Semiannual Report on Banking Applications Activity, covering the period of July 1- December 31, 2017.

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Federal Financial Institutions Examination Council (FFIEC)

The FFIEC announced that the FRB, FDIC, and OCC are finalizing revisions to streamline the Call Report.

Federal Housing Finance Agency (FHFA)

The FHFA released its 2017 Scorecard progress report, summarizing the major activities of Fannie Mae and Freddie Mac for the year.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of March 23, 2018. The last update prior to this was March 22, 2018.

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News.