Form 8941 - Credit for Small Employer Health Insurance Premiums

2013

Instructions for Form 8941

Department of the Treasury
Internal Revenue Service

Credit for Small Employer Health Insurance Premiums
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments

For the latest information about developments related to
Form 8941 and its instructions, such as legislation
enacted after they were published, go to www.irs.gov/
form8941.

What's New

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.

General Instructions
Purpose of Form

Eligible small employers (defined below) use Form 8941
to figure the credit for small employer health insurance
premiums for tax years beginning after 2009. The
maximum credit is a percentage of premiums the
employer paid during the tax year for certain health
insurance coverage the employer provided to certain
employees. But the credit may be reduced by limitations
based on the employer's full-time equivalent employees,
average annual wages, state average premiums, and
state premium subsidies and tax credits.

For tax-exempt small employers, the credit is
generally 25% of premiums paid, is also limited to the
amount of certain payroll taxes paid, and is claimed as a
refundable credit on Form 990-T, Exempt Organization
Business Income Tax Return. A tax-exempt small
employer is an eligible small employer described in
section 501(c) that is exempt from taxation under section
501(a). A tax-exempt employer not described in section
501(c) is generally not eligible to claim this credit.
However, a tax-exempt farmers' cooperative subject to tax
under section 1381 may be able to claim the credit as a
general business credit as discussed next.
For all other small employers, the credit is generally
35% of premiums paid, can be taken against both regular
and alternative minimum tax, and is claimed as part of the
general business credit on Form 3800.
Taxpayers other than partnerships, S
corporations, cooperatives, estates, and trusts,
whose only source of this credit is from those
pass-through entities, are not required to complete or file
this form. Instead, they can report this credit directly on
Form 3800.

TIP

Eligible Small Employers

You are an eligible small employer for the tax year if you
meet the following three requirements.
Jan 02, 2014

1. You paid premiums for employee health insurance
coverage under a qualifying arrangement. A
qualifying arrangement is generally an arrangement that
requires you to pay a uniform percentage (not less than
50%) of the premium cost for each enrolled employee's
health insurance coverage (defined later). However, an
arrangement that requires you to pay a uniform premium
for each enrolled employee (composite billing) and offers
different tiers of coverage (for example, self-only, self plus
one, and family coverage) can be a qualifying
arrangement even if it requires you to pay a uniform
percentage that is less than 50% of the premium cost for
employees not enrolled in self-only coverage.
In addition, an arrangement that requires you to pay a
separate premium for each employee based on age or
other factors (list billing) can be a qualifying arrangement
even if it requires you to pay a uniform percentage that is
less than 50% of the premium cost for some employees.
For details, see Employer Premiums Paid, Health
Insurance Coverage, and Qualifying Arrangement, later.
2. You had fewer than 25 full-time equivalent employees (FTEs) for the tax year. You may be able to meet
this requirement even if you had 25 or more employees.
For details, see Worksheets 1 and 2.
3. You paid average annual wages for the tax year of
less than $50,000 per FTE. For details, see Worksheets
1 and 3.
If you had more than 10 FTEs and average
annual wages of more than $25,000, the FTE and
CAUTION
average annual wage limitations (discussed later)
will separately reduce your credit. This may reduce your
credit to zero even if you had fewer than 25 FTEs and
average annual wages of less than $50,000.

!

Employers treated as a single employer. Treat the
following employers as a single employer to figure the
credit.
Employers who are corporations in a controlled group
of corporations.
Employers who are members of an affiliated service
group.
Employers who are partnerships, proprietorships, etc.,
under common control. See Regulations sections
1.414(c)-2, 1.414(c)-3, and 1.414(c)-4 for details.
Tax-exempt employers under common control. See
Regulations section 1.414(c)-5.
For details, see section 45R(e)(5)(A).

TIP

No more than one Form 8941 can be filed with a
tax return, unless the exception described in
Example 2 below applies.

Example 1. You are a sole proprietor with two
separate businesses and you file a separate Schedule C

Cat. No. 55222U

(Form 1040) for each business. You must treat both
businesses as a single employer to figure the credit. You
will file one Form 8941 for both businesses.

employee who was only enrolled for 10 pay periods. You
will need an additional set of calculations if the premium
amounts changed during the tax year.

Example 2. You and your spouse are both sole
proprietors and file a separate Schedule C (Form 1040)
for each of your separate businesses. Neither spouse was
an employee of the other spouse or participated in the
management of the other spouse's business at any time
during the tax year. No more than 50% of the gross
income of either business was derived from royalties,
rents, dividends, interest, and annuities and you otherwise
meet the requirements listed in Regulations section
1.414(c)-4(b)(5)(ii). Do not treat both businesses as a
single employer to figure the credit. If you and your
spouse are both eligible small employers, you can file two
Forms 8941 with a jointly filed Form 1040.

Health Insurance Coverage

For credit purposes, health insurance coverage means
benefits consisting of medical care (provided directly,
through insurance or reimbursement, or otherwise) under
any hospital or medical service policy or certificate,
hospital or medical service plan contract, or health
maintenance organization contract offered by a health
insurance provider.
A health insurance provider is either an insurance
company or another entity licensed under state law to
provide health insurance coverage.
Health insurance coverage also includes coverage
under the following plans.
Limited scope dental or vision plans.
Long-term care plans.
Nursing home care plans.
Home health care plans.
Community-based care plans.
Any combination of the above.

Employer Premiums Paid

Only premiums you paid for health insurance coverage
under a qualifying arrangement (discussed later) for
individuals considered employees are counted when
figuring your credit. For this purpose, if you are entitled to
a state tax credit or a state premium subsidy paid directly
to you for premiums you paid, do not reduce the amount
you paid by the credit or subsidy amount. Also, if a state
pays a premium subsidy directly to your insurance
provider, treat the subsidy amount as an amount you paid
for employee health insurance coverage.

In addition, health insurance coverage includes the
following.
Coverage only for a specified disease or illness.
Hospital indemnity or other fixed indemnity insurance.
Medicare supplemental health insurance.
Certain other supplemental coverage.
Similar supplemental coverage provided to coverage
under a group health plan.

If you pay only a portion of the premiums and your
employees pay the rest, only the portion you pay is taken
into account. For this purpose, any premium paid through
a salary reduction arrangement under a section 125
cafeteria plan is not treated as an employer paid premium.
For more information on cafeteria plans, see section 1 of
Publication 15-B, Employer's Tax Guide to Fringe
Benefits.

Employer premiums paid for health insurance
coverage can be counted in figuring the credit
CAUTION
only if the premiums are paid under a qualifying
arrangement.

!

Example 3. You offer health insurance coverage to
employees under a qualifying arrangement that requires
you to pay 60% of the premium cost for single
(employee-only) coverage for each employee enrolled in
any health insurance coverage you provide to employees.
The total premium for each employee enrolled in single
(employee-only) coverage is $5,200 per year or $100
($5,200 ÷ 52) for each weekly payday. The total premium
for each employee enrolled in family coverage is $12,376
per year or $238 ($12,376 ÷ 52) for each weekly payday.
Each payday you contribute $60 (60% of $100) toward
the premium cost of each employee enrolled in single
(employee-only) coverage and withhold the remaining $40
from the employee's paycheck to obtain the $100 total
weekly premium. Each payday you contribute $60 (the
same amount you pay toward the premiums of employees
enrolled in single coverage) toward the premium cost of
each employee enrolled in family coverage and withhold
the remaining $178 from the employee's paycheck to
obtain the $238 total weekly premium.
To determine the premiums you paid during the tax
year, multiply the number of pay periods during which the
employee was enrolled in the health insurance coverage
by $60. For example, you would have paid $3,120 ($60 ×
52) for an employee who was enrolled for the entire tax
year. You would have paid $600 ($60 × 10) for an

Health insurance coverage does not include the
following benefits.
Coverage only for accident, or disability income
insurance, or any combination thereof.
Coverage issued as a supplement to liability insurance.
Liability insurance, including general liability insurance
and automobile liability insurance.
Workers' compensation or similar insurance.
Automobile medical payment insurance.
Credit-only insurance.
Coverage for on-site medical clinics.
Other similar insurance coverage, specified in
regulations, under which benefits for medical care are
secondary or incidental to other insurance benefits.
Also, because the coverage must be offered by a
health insurance provider as discussed above, health
insurance coverage does not include benefits provided by
the following.
Health reimbursement arrangements (HRAs).
Flexible spending arrangements (health FSAs).
Coverage under other self-insured plans.
Health savings accounts (HSAs).
However, health insurance coverage may include
coverage under the following plans.
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Instructions for Form 8941 (2013)

separate premium for each employee based on age or
other factors (list billing) that provides other tiers of
coverage can be a qualifying arrangement even if it
requires you to pay a uniform percentage that is less than
50% of the premium cost for some employees. It is a
qualifying arrangement (assuming self-only coverage is
the least expensive tier of coverage) if it requires you to
pay the following amounts.
A uniform percentage (not less than 50%) for each
employee enrolled in self-only coverage as discussed
under Arrangements with list billing and only self-only
coverage above.
A uniform amount that is either equal to the amount you
would have paid toward self-only coverage (as discussed
above), a uniform percentage (not less than 50%) of the
premium charged, or a uniform percentage (not less than
50%) of your employer-computed composite rate (defined
below) for your self plus one coverage, for each employee
(if any) enrolled in self plus one coverage.
A uniform amount that is either equal to the amount you
would have paid toward self-only coverage (as discussed
above), a uniform percentage (not less than 50%) of the
premium charged, or a uniform percentage (not less than
50%) of your employer-computed composite rate (defined
below) for your family coverage, for each employee (if
any) enrolled in family coverage.
A uniform amount that is either equal to the amount you
would have paid toward self-only coverage (as discussed
above), a uniform percentage (not less than 50%) of the
premium charged, or a uniform percentage (not less than
50%) of your employer-computed composite rate (defined
below) for any other tier of coverage, for each employee
(if any) enrolled in any other tier of coverage (figured
separately for each tier).

Church welfare benefit plans.
Multiemployer health and welfare plans that provide
coverage through a health insurance provider.
For details, see Notice 2010-82 as discussed under More
Information, later.

Qualifying Arrangement

A qualifying arrangement is generally an arrangement that
requires you to pay a uniform percentage (not less than
50%) of the premium cost for each enrolled employee's
health insurance coverage (defined earlier). An
arrangement that offers different tiers of coverage (for
example, self-only, self plus one, and family coverage) is
generally a qualifying arrangement if it requires you to pay
a uniform percentage (not less than 50%) separately for
each tier of coverage you offer. However, an arrangement
can be a qualifying arrangement even if it requires you to
pay a uniform percentage that is less than 50% of the
premium cost for some employees. For more details
about the following exceptions, see Notice 2010-82 as
discussed under More Information, later.
Arrangements with composite billing. An
arrangement that requires you to pay a uniform premium
for each enrolled employee (composite billing) and offers
different tiers of coverage can be a qualifying arrangement
even if it requires you to pay a uniform percentage that is
less than 50% of the premium cost for employees not
enrolled in self-only coverage. It is a qualifying
arrangement (assuming self-only coverage is the least
expensive tier of coverage) if it requires you to pay the
following amounts.
A uniform percentage (not less than 50%) of the
premium cost for each employee (if any) enrolled in
self-only coverage.
A uniform amount that is no less than the amount you
would have paid toward self-only coverage for each
employee (if any) enrolled in self plus one coverage.
A uniform amount that is no less than the amount you
would have paid toward self-only coverage for each
employee (if any) enrolled in family coverage.
A uniform amount that is no less than the amount you
would have paid toward self-only coverage for each
employee (if any) enrolled in any other tier of coverage
(figured separately for each tier).

Employer-computed composite rate. The
employer-computed composite rate for a tier of coverage
is the average rate determined by adding the premiums
for that tier of coverage for all employees eligible to
participate in the health insurance plan (whether or not
they actually receive coverage under the plan or under
that tier of coverage) and dividing by the total number of
such eligible employees.
More than one plan. Different types of health insurance
plans are generally not aggregated for purposes of
meeting the qualifying arrangement requirement. For
example, if you offer a major medical insurance plan and a
stand-alone vision plan, you generally must separately
satisfy the requirements for a qualifying arrangement with
respect to each type of coverage. For exceptions, see
Notice 2010-82 as discussed under More Information,
later.

Arrangements with list billing and only self-only coverage. An arrangement that requires you to pay a
separate premium for each employee based on age or
other factors (list billing) that only provides self-only
coverage can be a qualifying arrangement even if it
requires you to pay a uniform percentage that is less than
50% of the premium cost for some employees. It is a
qualifying arrangement if it requires you to pay either of
the following amounts.
A uniform percentage (not less than 50%) of the
premium charged for each employee enrolled in the
self-only coverage, or
A uniform percentage (not less than 50%) of your
employer-computed composite rate (defined later) for
your self-only coverage for each employee enrolled in the
self-only coverage.

State subsidies and credits. For this purpose, if you
are entitled to a state tax credit or a state premium
subsidy paid directly to you for premiums you paid, do not
reduce the amount you paid by the credit or subsidy
amount. Also, if a state pays a premium subsidy directly to
your insurance provider, treat the subsidy amount as an
amount you paid for employee health insurance coverage.
Multiemployer health and welfare plans. For a special
rule that applies to multiemployer health and welfare

Arrangements with list billing and other tiers of coverage. An arrangement that requires you to pay a
Instructions for Form 8941 (2013)

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plans, see Notice 2010-82 as discussed under More
Information, later.

Specific Instructions

State Premium Subsidy and Tax
Credit Limitation

If your only source for this credit is a partnership,
S corporation, cooperative, estate, or trust, skip
lines 1 through 14 of the form and report the
credit you received from these sources on:
Line 15 if you are one of these entities, or
Form 3800, line 4h, if you are not one of these entities.

TIP

Your credit may be reduced if you are entitled to a state
tax credit or a state premium subsidy for the cost of health
insurance coverage you provide under a qualifying
arrangement to individuals considered employees. The
state tax credit may be refundable or nonrefundable and
the state premium subsidy may be paid to you or directly
to your insurance provider.

Use Worksheets 1 through 7 to figure the amounts to
report on various lines of Form 8941.
Use Worksheets 1, 2, and 3 to figure the amounts to
report on lines 1a, 2, and 3 of Form 8941.
Use Worksheet 4 to figure the amounts to report on
lines 4, 5, and 13 of Form 8941.
Use Worksheets 5, 6, and 7 to figure the amounts to
report on lines 8, 9, and 14 of Form 8941.

Although a state tax credit or premium subsidy paid
directly to you does not reduce the amount of your
employer premiums paid, and although a state premium
subsidy paid directly to an insurance provider is treated as
an employer premium you paid, the amount of your credit
cannot be more than your net premium payments.
Net premium payments are employer premiums paid
(discussed earlier) minus the amount of any state tax
credits you received or will receive and any state premium
subsidies paid either to you or directly to your insurance
provider for premiums for health insurance coverage you
provide under a qualifying arrangement to individuals
considered employees.

Payroll Tax Limitation for Tax-Exempt
Small Employers

The credit for tax-exempt small employers cannot exceed
the amount of certain payroll taxes. For tax years
beginning in 2013, payroll taxes, for this purpose, mean
only the following taxes.
Federal income taxes the tax-exempt employer was
required to withhold from employees' wages in calendar
year 2013.
Medicare taxes the tax-exempt employer was required
to withhold from employees' wages in calendar year 2013.
Medicare taxes the tax-exempt employer was required
to pay for calendar year 2013.

Premium Deduction Reduced

You must reduce your deduction for the cost of providing
health insurance coverage to your employees by the
amount of any credit for small employer health insurance
premiums allowed with respect to the coverage.

More Information

For more information about this credit, see the following.
Section 45R.
Notice 2010-44, 2010-22 I.R.B. 717, available at
www.irs.gov/irb/2010-22_IRB/ar12.html.
Notice 2010-82, 2010-51 I.R.B. 857, available at
www.irs.gov/irb/2010-51_IRB/ar09.html.
IRS.gov.

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Instructions for Form 8941 (2013)

Worksheet 1. Information Needed To
Complete Line 1a and Worksheets 2
and 3

Excluded employees. The following individuals are not
considered employees when you figure this credit. Hours
and wages of these employees and premiums paid for
them are not counted when you figure your credit.
The owner of a sole proprietorship.
A partner in a partnership.
A shareholder who owns (after applying the section 318
constructive ownership rules) more than 2% of an S
corporation.
A shareholder who owns (after applying the section 318
constructive ownership rules) more than 5% of the
outstanding stock or stock possessing more than 5% of
the total combined voting power of all stock of a
corporation that is not an S corporation.
A person who owns more than 5% of the capital or
profits interest in any other business that is not a
corporation.
Family members or a member of the household who is
not a family member but qualifies as a dependent on the
individual income tax return of a person listed above.
Family members include a child (or descendant of a
child), a sibling or step-sibling, a parent (or ancestor of a
parent), a step-parent, a niece or nephew, an aunt or
uncle, or a son-in-law, daughter-in-law, father-in-law,
mother-in-law, brother-in-law, or sister-in-law. A spouse is
also considered a family member for this purpose.

If you need more rows, use a separate sheet and include
the additional amounts in the totals below.
(a)
Individuals
Considered
Employees

(b)
Employee
Hours of
Service

(c)
Employee
Wages
Paid

 1.
 2.
 3.
 4.
 5.
 6.
 7.
 8.
 9.
10.
11.

Leased employees. Do not use premiums paid by the
leasing organization to figure your credit. Also, a leased
employee who is not a common law employee is
considered an employee for credit purposes if he or she
does all the following.
Provides services to you under an agreement between
you and a leasing organization.
Has performed services for you (or for you and a
related person) substantially full time for at least 1 year.
Performs services under your primary direction or
control.
But do not use hours, wages, or premiums paid with
respect to the initial year of service on which leased
employee status is based.

12.
13.
14.
15.
16.
17.
18.
19.
20.
21.

Seasonal employees. Seasonal employees who work
for you 120 or fewer days during the tax year are not
considered employees in determining FTEs and average
annual wages. But premiums paid on their behalf are
counted in determining the amount of the credit. Seasonal
workers include retail workers employed exclusively
during holiday seasons. Seasonal workers also include
workers employed exclusively during the summer.

22.
23.
24.
25.
Totals:

Household and other nonbusiness employees.
Household employees and other employees who are not
performing services in your trade or business are
considered employees if they otherwise qualify as
discussed above. A sole proprietor must include both
business and nonbusiness employees to determine FTEs,
average annual wages, and premiums paid.

Column (a), Individuals Considered
Employees
Enter the name or other identifying information for all
individuals considered employees for purposes of this
credit.

Ministers. A minister performing services in the exercise
of his or her ministry is treated as self-employed for social
security and Medicare purposes. However, for credit
purposes, whether a minister is an employee or
self-employed is determined under the common law test

In general, all employees who perform services for you
during the tax year are taken into account in determining
your FTEs, average annual wages, and premiums paid.
Rules that apply to certain types of employees are
discussed below.
Instructions for Form 8941 (2013)

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Worksheet 2. Information Needed To
Complete Line 2 (FTEs)

for determining worker status. Self-employed ministers
are not considered employees.

Column (b), Employee Hours of
Service

Your credit is reduced if you had more than 10 full-time
equivalent employees (FTEs) for the tax year. If you had
25 or more FTEs for the tax year, your credit is reduced to
zero.

Enter the total hours of service for the tax year for each
employee listed in column (a). Do not enter more than
2,080 hours for any employee. But enter -0- for seasonal
employees who worked 120 or fewer days during the tax
year.
Employee hours of service. An employee’s hours of
service for a year include the following.
Each hour for which the employee is paid, or entitled to
payment, for the performance of duties for the employer
during the employer’s tax year.
Each hour for which an employee is paid, or entitled to
payment, by the employer on account of a period of time
during the employer's tax year during which no duties are
performed due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or
leave of absence (except that no more than 160 hours of
service are required to be counted for an employee on
account of any single continuous period during which the
employee performs no duties).
To figure the total number of hours of service you must
take into account for an employee for the year, you can
use any of the following methods.
Actual hours worked method. Determine actual
hours of service from records of hours worked and hours
for which payment is made or due (payment is made or
due for vacation, holiday, illness, incapacity, etc., as
described above).
Days-worked equivalency method. Use a
days-worked equivalency whereby the employee is
credited with 8 hours of service for each day for which the
employee would be required to be credited with at least
one hour of service under the rules described above.
Weeks-worked equivalency method. Use a
weeks-worked equivalency whereby the employee is
credited with 40 hours of service for each week for which
the employee would be required to be credited with at
least one hour of service under the rules described above.

!

1.

2. Hours of service per FTE . . . . . . . . .

2.

3. Full-time equivalent employees.
Divide line 1 by line 2. If the result is not
a whole number (0, 1, 2, etc.),
generally round the result down to
the next lowest whole number. For
example, round 2.99 down to 2.
However, if the result is less than one,
enter 1. Report this number on Form
8941, line 2 . . . . . . . . . . . . . . . . . .

3.

2,080

Worksheet 3. Information Needed To
Complete Line 3 (Average Annual
Wages)
Your credit is reduced if you paid average annual wages
of more than $25,000 for the tax year. If you paid average
annual wages of $50,000 or more for the tax year, your
credit is reduced to zero.

Column (c), Employee Wages Paid
CAUTION

1. Enter the total employee hours of
service from Worksheet 1, column
(b) . . . . . . . . . . . . . . . . . . . . . . . . .

1. Enter the total employee wages paid
from Worksheet 1, column (c) . . . . . .

1.

2. Enter FTEs from Worksheet 2,
line 3 . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Average annual wages. Divide line 1
by line 2. If the result is not a multiple of
$1,000 ($1,000, $2,000, $3,000, etc.),
round the result down to the next
lowest multiple of $1,000. For example,
round $2,999 down to $2,000. Report
this amount on Form 8941, line 3 . . .

3.

Complete Worksheet 2 before you complete
column (c) of Worksheet 1. Do not complete
column (c) if Worksheet 2, line 3, is 25 or more.

Enter the total wages paid for the tax year for each
employee listed in column (a). But enter -0- for seasonal
employees who worked 120 or fewer days during the tax
year.
Wages, for this purpose, mean wages subject to social
security and Medicare tax withholding determined without
considering any wage base limit.

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Instructions for Form 8941 (2013)

Worksheet 4. Information Needed To
Complete Lines 4, 5, and 13 and
Worksheet 7

Column (b), Employer Premiums Paid

Enter the total employer premiums paid for the tax year for
each employee listed in column (a). For details, see
Employer Premiums Paid, earlier.

Column (c), Employer State Average
Premiums

If you need more rows, use a separate sheet and include
the additional amounts in the totals below.
(a)
Enrolled
Individuals
Considered
Employees

(b)
Employer
Premiums
Paid

(c)
Employer
State
Average
Premiums

Your credit is reduced if the employer premiums paid are
more than the employer premiums that would have been
paid if individuals considered employees were enrolled in
a plan with a premium equal to the average premium for
the small group market in the state in which the employee
works.

(d)
Enrolled
Employee
Hours of
Service

 1.

Enter, for each employee listed in column (a), the
premiums you would have paid if the employee had
enrolled in a plan or plans with a total premium equal to
the average premium for the small group market in the
state in which the employee works.

 2.
 3.
 4.
 5.

The following table lists the average premium for the
small group market in each state for tax years beginning in
2013. Family coverage includes any coverage other than
single (employee-only) coverage.

 6.
 7.
 8.
 9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Totals:

Column (a), Enrolled Individuals
Considered Employees

Enter the name or other identifying information for each
individual listed in column (a) of Worksheet 1 who was
enrolled in health insurance coverage you provided to
employees during the tax year under a qualifying
arrangement. For details, see Health Insurance Coverage
and Qualifying Arrangement, earlier.

Instructions for Form 8941 (2013)

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Table A. 2013 State Average
Premiums for Small Group Markets
Single
(Employee-Only)
Coverage

Family
Coverage

Alabama

$5,363

$13,185

Alaska

7,961

16,808

Arizona

4,946

12,006

Arkansas

4,546

10,575

California

5,345

12,809

Colorado

5,445

13,937

Connecticut

6,307

16,011

Delaware

6,555

15,144

District of Columbia

6,133

16,079

Florida

5,602

13,261

Georgia

5,605

12,369

Hawaii

5,246

12,782

Idaho

4,901

10,738

Illinois

6,017

14,453

Indiana

5,710

13,029

Iowa

4,963

12,071

Kansas

5,164

12,322

Kentucky

4,936

11,981

Louisiana

5,390

12,691

Maine

5,590

13,064

Maryland

5,610

13,965

Massachusetts

6,323

16,502

Michigan

5,569

13,256

Minnesota

5,588

14,077

Mississippi

5,042

11,964

Missouri

5,268

12,366

Montana

5,433

11,739

Nebraska

5,463

13,270

Nevada

5,417

12,125

New Hampshire

6,153

15,367

New Jersey

6,250

15,225

State

Single
(Employee-Only)
Coverage

Family
Coverage

New Mexico

5,639

13,121

New York

6,242

15,478

North Carolina

5,510

12,541

North Dakota

5,073

12,343

Ohio

5,174

12,710

Oklahoma

5,142

11,995

Oregon

5,413

12,811

Pennsylvania

5,618

13,753

Rhode Island

6,345

15,363

South Carolina

5,351

12,473

South Dakota

5,364

12,750

Tennessee

5,251

11,663

Texas

5,327

13,313

Utah

4,951

12,619

Vermont

5,800

13,409

Virginia

5,449

13,241

Washington

5,292

12,196

West Virginia

5,947

13,734

Wisconsin

5,786

14,623

Wyoming

5,948

14,314

State

Example 4. Assume the same facts that were used in
Example 3. The $60 you contribute each payday toward
employee health insurance coverage is 60% ($60 ÷ $100)
of the weekly premium for each employee enrolled in
single (employee-only) coverage and 25.21% ($60 ÷
$238) of the weekly premium for each employee enrolled
in family coverage.
In this situation, the total average premium limitation
amounts that apply are 60% of the applicable amounts
shown in the single coverage column of Table A for each
employee enrolled in single coverage and 25.21% of the
applicable amounts shown in the family coverage column
of Table A for each employee enrolled in family coverage.
You have an employee enrolled in single
(employee-only) coverage who works for you in Maryland.
The single coverage amount shown in Table A for
Maryland is $5,610 or $107.88 ($5,610 ÷ 52) for each
weekly payday. The amount you are considered to have
paid toward this employee's health insurance coverage
based on the average premiums in Table A is $64.73
(60% of $107.88) each payday.
To determine the premiums you would have paid for
this employee during the tax year if the employee had
enrolled in a state-average-premium plan, multiply the
number of pay periods during which your employee was
enrolled in the health insurance coverage by $64.73. For
example, you would have paid $3,365.96 ($64.73 × 52) if
the employee was enrolled for the entire tax year. You
would have paid $647.30 ($64.73 × 10) if the employee
was only enrolled for 10 pay periods. You will need an

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Instructions for Form 8941 (2013)

Worksheet 7. Information Needed To
Complete Line 14 (If Line 12 is More
Than Zero)

additional set of calculations if the premium amounts
changed during the tax year.

Column (d), Enrolled Employee Hours
of Service

!

1. Enter the total enrolled employee hours of
service from Worksheet 4, column
(d) . . . . . . . . . . . . . . . . . . . . . . . . . .
1.

Do not complete Worksheet 4 column (d) if Form
8941, line 12, is zero.

CAUTION

2. Hours of service per FTE . . . . . . . . . .

Enter the amount from column (b) of Worksheet 1 for each
employee listed in column (a) of Worksheet 4.

2. Enter the number from Form
8941, line 2 . . . . . . . . . . . .

2.

3. Subtract 10 from line 2 . . . . .

3.

4. Divide line 3 by 15. Enter the
result as a decimal (rounded to
at least 3 places) . . . . . . . .

4.

5. Multiply line 1 by line 4 . . . . . . . . . . . . . .
6. Subtract line 5 from line 1. Report this
amount on Form 8941, line 8 . . . . . . . . .

Line 15

1.

Enter any credit for small employer health insurance
premiums from:
Schedule K-1 (Form 1065), box 15 (code P),
Schedule K-1 (Form 1120S), box 13 (code P),
Schedule K-1 (Form 1041), box 13 (code G), and
Any notice of credit allocation you receive from a
cooperative.
Taxpayers other than partnerships, S
corporations, cooperatives, estates, and trusts,
whose only source of this credit is from those
pass-through entities, are not required to complete
line 15. Instead, they can report this credit directly on
Form 3800, line 4h.

5.

TIP

6.

Worksheet 6. Information Needed To
Complete Line 9 (If Line 3 is More
Than $25,000)
1. Enter the amount from Form 8941,
line 8 . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Enter the amount from Form
8941, line 7 . . . . . . . . . . . . .

2.

3. Enter the amount from Form
8941, line 3 . . . . . . . . . . . . .

3.

4. Subtract $25,000 from
line 3 . . . . . . . . . . . . . . . . . .

4.

5. Divide line 4 by $25,000. Enter
the result as a decimal (rounded
to at least 3 places) . . . . . . . .

5.

Line 17
Cooperatives. A cooperative described in section
1381(a) must allocate to its patrons the credit in excess of
its tax liability. Therefore, to figure the unused amount of
the credit allocated to patrons, the cooperative must first
figure its tax liability. While any excess is allocated to
patrons, any credit recapture applies as if the cooperative
had claimed the entire credit.
If the cooperative is subject to the passive activity rules,
include on line 15 any credit for small employer health
insurance premiums from passive activities disallowed for
prior years and carried forward to this year. Complete
Form 8810, Corporate Passive Activity Loss and Credit
Limitations, to determine the allowed credit that must be
allocated to patrons. For details, see the Instructions for
Form 8810.

1.

6. Multiply line 2 by line 5 . . . . . . . . . . . . . .

6.

7. Subtract line 6 from line 1. Report this
amount on Form 8941, line 9 . . . . . . . . .

7.

Estates and Trusts. Allocate the credit on line 16
between the estate or trust and the beneficiaries in the
same proportion as income was allocated and enter the
beneficiaries' share on line 17.
If the estate or trust is subject to the passive activity
rules, include on line 15 any credit for small employer
health insurance premiums from passive activities
disallowed for prior years and carried forward to this year.
Complete Form 8582-CR, Passive Activity Credit
Limitations, to determine the allowed credit that must be
allocated between the estate or trust and the

Line 10

Enter the total amount of any state premium subsidies
paid and any state tax credits available to you for
premiums included on line 4. For details, see State
Premium Subsidy and Tax Credit Limitation, earlier.

Instructions for Form 8941 (2013)

2,080

3. Divide line 1 by line 2. If the result is not a
whole number (0, 1, 2, etc.), generally
round the result down to the next
lowest whole number. For example,
round 2.99 down to 2. However, if the
result is less than one, enter 1. Report
3.
this number on Form 8941, line 14 . . .

Worksheet 5. Information Needed To
Complete Line 8 (If Line 2 is More
Than 10)
1. Enter the amount from Form 8941,
line 7 . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

-9-

beneficiaries. For details, see the Instructions for Form
8582-CR.

Line 19

Enter the total amount of certain payroll taxes. Payroll
taxes, for this purpose, mean only the following taxes.
Federal income taxes the tax-exempt employer was
required to withhold from employees' wages in calendar
year 2013.

Medicare taxes the tax-exempt employer was required
to withhold from employees' wages in calendar year 2013.
Medicare taxes the tax-exempt employer was required
to pay for calendar year 2013.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We need it to ensure that you are complying with these laws
and to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section 6103.

hh

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden
for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the
estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers
who file this form is shown below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10 hr., 51 min.
1 hr., 23 min.
2 hr., 46 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

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Instructions for Form 8941 (2013)