Reform Series Part I: Small Business Tax Credit
- 9 September 2010 by admin 0 Comments
Due to the confusion that nearly everyone is experiencing when it comes to Health Care Reform, we have decided it would be important to provide information in greater abundance directly to you. This is the first in a multi-part series on Health Care Reform. In the coming weeks, we will review Guaranteed Issue Policies, Medicare changes, Grandfathered status, Dependent Continuation, and more. Please revisit often for updates!
Brief overview of the Affordable Care Act
The Affordable Care Act was signed into law on March 23, 2010 and is designed to provide relief to the millions of Americans who may be without health insurance, or who may be struggling to pay their health insurance premiums due to the cost and current economic conditions. The reforms included in the law will be implemented over four years and beyond. Most of the changes will take effect by 2014.
The Government has provided a website to help explain more details of the Affordable Care Act.
Part I: Small Business Tax Credit
The Small Business Tax Credit is one of the first items of health care reform to roll out. It went effective January 1, 2010 and is aimed to provide assistance to small businesses by helping make it more affordable to fund the cost of covering their employees. The tax credit is specifically targeted for those with low- and moderate-income workers.
By implementing a tax credit, the Government hopes to provide incentive to small businesses to either offer health insurance coverage for the first time or to continue with the coverage they already have. Due to economic concerns, many businesses, small and large alike, have been eliminating or reigning back on health insurance offerings.
Tax credits of up to 35 percent of premiums will be available to firms that choose to offer coverage. Beginning in 2014, however, the small business tax credits will cover 50 percent of premiums.
The tax credits are projected to provide a total of $40 billion in relief for small firms over the next 10 years.
What does it take to qualify?
In order to qualify for the Small Business Tax Credit, you must meet a few criteria:
- The small business must have fewer than 25 full-time employees.
- Must have average annual wages of less than $50,000.
- Must purchase health insurance for employees.
- Maximum credit will be available to employers with 10 or fewer full-time employees and average annual wages of less than $25,000.
- Must contribute at least 50 percent of the total premium cost.
To see if you qualify, use our Small Business Tax Credit Calculator.
For more information on how your Small Business will be affected, please contact us directly at (800) 293-1147, or by email at email@example.com