Supporting Statement

SUPPORTING STATEMENT
OMB No. 1545-2198

1.

CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Section 45R of the Internal Revenue Code (Code), as enacted by the Patient Protection
and Affordable Card Act, offers a tax credit to certain small employers that provide
health insurance coverage to their employees. The credit is available for taxable years
beginning after December 31, 2009. Both taxable employers and employers that are
organizations described in § 501(c) and exempt from tax under § 501(a) (tax-exempt
employers) may be eligible for the § 45R credit. Eligible small employers use Form 8941
to figure the credit for small employer health insurance premiums.

Notice 2010-44, 2010-22 I.R.B. 717, provides guidance on § 45R as in effect for taxable
years beginning before January 1, 2014, including transition relief for taxable years
beginning in 2010 with respect to the requirements for a qualifying arrangement under §
45R. Notice 2010-82 expands on the guidance provided in Notice 2010-44 and provides
guidance on additional issues relating to the small employer tax credit.
Proposed regulations, REG-113792-13, were published in the Federal Register (78 FR
52719), on August 26, 2013, that will incorporate the provisions of Notice 2010-44 and
2010-82 as modified to reflect the differences between the statutory provisions
applicable to years before 2014 and those applicable to years after 2013

2.

USE OF DATA
Eligible small employers with less than 25 employees and average annual wages
of less than $50,000 will qualify for the credit. Form 8941 will help the taxpayer
compute the tax credit and be in compliance with their tax filing obligations. It
also provides the Treasury Department and the IRS statistical data on how many
taxpayers are benefiting from the new law.

3.

USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
Electronic filing is offered for Form 8941. Form 8941 is an attachment to the
business tax return which could be filed with Form 1120, Form 1120-S, Form
1065 or other tax return.

4.

EFFORTS TO IDENTIFY DUPLICATION
We have attempted to eliminate duplication within the agency wherever possible.

5.

METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER
SMALL ENTITIES
The information required to determine a small employer’s eligibility for, and
amount of, an applicable credit, generally consisting of the annual hours worked
by its employees, the annual wages paid to its employees, the cost of the
employees’ premiums for qualified health plans and the employer’s contribution
towards those premiums, is information that the small employer generally will
retain for business purposes and be readily available to accumulate for purposes
of completing the necessary form for claiming the credit.
In addition, this credit is available to any eligible small employer only twice
(because the credit can be claimed by a small employer only for two consecutive
taxable years beginning after December 31, 2013, beginning with the taxable
year for which the small employer first claims the credit). Accordingly, no small
employer will calculate the credit amount or complete the process for claiming
the credit under this regulation more than two times.

6.

CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL
PROGRAMS OR POLICY ACTIVITIES
Not applicable.

7.

SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE
INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)
Not applicable.

8.

CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON
AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF
INSTRUCTIONS AND FORMS, AND DATA ELEMENTS
Periodic meetings are held between IRS personnel and representatives of the
American Bar Association, the National Society of Public Accountants, the
American Institute of Certified Public Accountants, and other professional groups
to discuss tax law and tax forms. During these meetings, there is an opportunity
for those attending to make comments regarding Form 8941.
In response to the Federal Register notice (78 FR 54514), dated September 4,
2013, we received no comments during the comment period regarding Form
8941.

9.

EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO
RESPONDENTS
Not applicable.

10.

ASSURANCE OF CONFIDENTIALITY OF RESPONSES
Generally, tax returns and tax return information are confidential as required by
26 USC 6103.

11.

JUSTIFICATION OF SENSITIVE QUESTIONS
No personally identifiable information (PII) is collected.

12.

ESTIMATED BURDEN OF INFORMATION COLLECTION
The burden estimate is as follows:

Form 8941 &
Worksheets

Number of
Responses

Time per
Response

3,046,964

11 hrs., 15 min.

Total
Hours
34,278,346

Estimates of the annualized cost to respondents for the hour burdens shown are
not available at this time.
13.

ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register notice dated September 4, 2013,
requested public comments on estimates of cost burden that are not captured in
the estimates of burden hours, i.e., estimates of capital or start-up costs and
costs of operation, maintenance, and purchase of services to provide
information. However, we did not receive any responses from taxpayers on this
subject. As a result, estimates of these cost burdens are not available at this
time.

14.

ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT
After consultation with various functions within the Service, we have determined
that the cost of developing, printing, processing, distribution and overhead for the
form is $15,000.

15.

REASONS FOR CHANGE IN BURDEN
The credit figured on Form 8941 is an important part of the Affordable Care Act
(ACA). In response to concerns raised about the complexity of the form, focus
group testing was conducted on the form and instructions in 2013. In response
to recommendations included in the final focus group testing report, editorial
changes were made to simplify the form.

Form 8941 was revised to refer filers directly to the worksheets in the
instructions. Repetitive line instructions were removed and definitions were
moved closer to the related worksheets. We are adding a caution at the top of
the form to direct filers to the worksheets in the instructions.
The focus group testing showed that leaving the option of not using the
worksheets open created duplication in the instructions that confused filers. The
instructions were reorganized to eliminate this duplication and try to prevent the
"flipping back and forth" observed during the focus group testing. The testing
also prompted the inclusion of worksheet references directly on the form.
These actions resulted in a decrease in burden of 5,911,110 hours.
This submission is made to accurately reflect the decrease in burden achieved
with their deletion.
16.

PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
Not applicable.

17.

REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS
INAPPROPRIATE
See attached

18.

EXCEPTIONS TO THE CERTIFICATION STATEMENT ON OMB FORM 83-I
Not applicable.

Note: The following paragraph applies to all of the collections of information in this
submission:
An agency may not conduct or sponsor, and a person is not required to respond
to, a collection of information unless the collection of information displays a valid
OMB control number. Books or records relating to a collection of information
must be retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and tax return
information are confidential, as required by 26 U.S.C. 6103.