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Massachusetts Small Businesses Eligible for New Wellness Tax Credit

May 17, 2013

Patrick L. Connolly, CPA, MST
Partner

Promoting employee wellness through workplace education, incentives and other programs can have a direct and positive impact on productivity while also helping to control employer healthcare costs. 

A 2011 study published by the American Journal of Health Promotion found that healthcare costs rose at a 15 percent slower rate among employees who participated in wellness programs.

Now small businesses in Massachusetts can earn a state tax credit worth 25 percent of the cost to implement qualified wellness programs.

The Wellness Tax Credit is capped at $10,000 per business per year, with an annual limit of $15 million in credits for the entire program. That means qualified businesses will be awarded the Wellness Tax Credit on a first come, first served basis.

Businesses must qualify for the credit through the Massachusetts Department of Public Health (DPH) by completing a multi-part questionnaire. 

Costs that are eligible for the Wellness Tax Credit include:

  • Salaries of those employees charged with implementing wellness programs
  • Awareness and wellness education programs and materials
  • Related vendor costs
  • Workplace environment changes and improvements
  • Financial incentives for employee participation in wellness programs
  • Paid time off for health screenings, wellness check-ups and other related appointments
  • Injury prevention programs, safety and other training and education, signage and related costs
  • Data collection and program evaluation costs

The DPH recently completed their regulations governing the Wellness Tax Credit program. The online application for the credit will be available this spring at the DPH website: http://www.mass.gov/eohhs/consumer/wellness/health-promotion/massachusetts-wellness-tax-credit.html

Patrick Connolly, CPA, is a partner with BlumShapiro, the largest regional accounting, tax and business consulting firm based in New England, with offices in Massachusetts, Connecticut and Rhode Island. The firm, with 340 professionals and staff, offers a diversity of services which includes auditing, accounting, tax and business advisory services. In addition, BlumShapiro provides a variety of specialized consulting services such as succession and estate planning, business technology services, employee benefit plan audits, litigation support and valuation and financial staffing. The firm serves a wide range of privately held companies, government and non-profit organizations and provides non-audit services for publicly traded companies.


Disclaimer: Under U.S. Treasury Department guidelines, we hereby inform you that (1) any tax advice contained in this communication is not intended or written to be used, and cannot be used by you, for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service (or state and local or other tax authorities), and (2) no part of any tax advice contained in this communication is intended to be used, and cannot be used, by any party to promote, market or recommend any transaction or tax-related matter(s) addressed herein without the express and written consent of Blum, Shapiro & Company, P.C.
 

 

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