The Affordable Care Act & Your NonProfit
If your nonprofit has fewer than 25 full-time equivalent employees, then it might be eligible for a perk that has been largely overlooked but could yield a cash refund from the IRS.
For purposes of the Affordable Care Act, any private employer (both for-profit and nonprofit) with fewer than 25 employees is considered to be a "small business." The Small Business Health Care Tax Credit provision gives small employers—both for-profits and nonprofits—a credit for providing health insurance for their employees. For nonprofits, the "credit" is a refund on a portion of the expenses that the nonprofit pays for health insurance coverage for its employees.
In order to be eligible, the nonprofit must pay at least 50 percent of the premium for its employees' health insurance, and average annual wages for all employees must be less than $50,000 per FTE. A bit of calculating is required to determine eligibility and what the refund amount will be—but depending on the number of employees and their annual wages, receiving the refund could be a nice cash boost to advance your mission.
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