American Rescue Plan Premium Tax Credit

laurjohn · ‎April 19, 2021

Hi,

We have an s corp with two over 2% employees including my husband and myself. We do the S-Corp health insurance payment on each payroll and it is added to the W-2. My question is that now under the new American Recovery Act, we qualify for the Premium Tax Credit which is applied to our health insurance premiums each month in the form of a tax credit.

Should we continue to add the full premium amount through payroll or do we need to now deduct the amount of the tax credit from the health insurance premium amount? For example if we are adding $1700 per month through payroll for s-corp insurance payment and the premium tax credit is $1000 per month do we change it to $700 or keep it at the $1700?

Thanks!

Lauren

JoesemM · ‎April 19, 2021

Thanks for getting in touch with us today, @laurjohn.

Only the state tax agencies can verify if you need to continue to add the full premium amount through payroll or deduct the amount of the tax credit from the health insurance premium amount.

That being said, here's an article you can read to learn more about how you can contact your state tax agency: Payroll Tax Compliance Links. Just proceed to the Unemployment Tax column to view their contact information.

Also, I'm adding this article that you can read to help manage your payroll account and transaction: Help Articles for QuickBooks Online Payroll.

Know that you can always click the Reply button and leave a comment down below if you have any other concerns. Have a good one!

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American Rescue Plan Premium Tax Credit

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