What's new for your business and the Affordable Care Act ("Obamacare") in 2013? One new requirement for larger employers, a limit on employee flexible spending accounts, and a reminder about applying for the health care tax credit:
1. Reporting Health Care Benefits on 2012 employee W-2 forms
If you furnish more than 250 employee W-2 forms for 2012 taxes, you must include the amount your business paid for employee coverage on each employee's W-2.. Read more about how to complete
2. Tax Credits for Small Businesses Offering Health Benefits
For 2012 and 2013 taxes, you may be eligible for a tax credit if you have fewer than 25 full-time equivalent employees and you provide health care benefits for employees. Read more about the details of how you might qualify for this tax credit for small businesses from William Perez at Tax Planning. To apply for the credit, you file IRS Form 8941 with your business tax return, so if you haven't filed your 2012 business taxes, there's still time to apply for this health care tax credit.
3. Limit on Employee Deductions for Flexible Spending Accounts
If you have a "flex" plan as part of your employee health care coverage, you must limit employees to no more than $2500 per year in deductions, starting in 2013. Before this year, there was no law requiring a limit, but many employers put limits on "flex" plans for various reasons. A recent Forbes article mentions that these flexible spending accounts have been misused and the "use it or lose it" approach has caused money to be left unusable in employee accounts. Don't forget to change your accounting software for this limit and be sure to inform employees they can only deduct $2500.
Read more about 2013 health care law changes for businesses