Jump directly to the content

A Valuable Tax Credit for Churches

How Small Church Staffs May Benefit from a Health Care Reform Provision

One of the main objectives of President Obama's health care reform law (the "Affordable Care Act") is universal health coverage. The Act contains several provisions to achieve this goal. One of them is a new tax credit that will help small businesses and small tax-exempt organizations (including churches) afford the cost of providing health insurance for their employees. The credit is up to 25 percent of the cost of health insurance premiums paid by a qualifying employer for its employees.

Many church leaders are confused by this provision. After all, how will a tax credit (a reduction in taxes) benefit churches that pay no taxes? In fact, the credit does benefit tax-exempt entities because the law makes it "refundable," meaning that it is payable in cash.

For churches whose fiscal year ends on December 31, the deadline to apply for the 2010 tax year already passed. Those using a different ...

Log In For Full Access

Interested in becoming a member? Learn more.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Related Topics:
Posted:
  • July 1, 2011

Related ResourcesView All

2020 Church & Clergy Tax Guide
2020 Church & Clergy Tax Guide
Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
Church Finance
Church Finance
Learn about budgeting, financial reporting, tax compliance, insurance coverage, and more.
Church Compensation
Church Compensation
Learn the many pieces of employee compensation.
Politics and the Church
Politics and the Church
Tax and legal guidelines faith-based organizations need to know before jumping into the political fray.