Total HR wants you to know what health care reform means for your business and how the new tax credits will help small employers who pay for benefits. Included in the Patient Protection and Affordable Care Act, the tax credit is the first health care reform provision to go into effect. The tax credit is designed to help small businesses right away before the Small Business Health Options Programs, or “SHOP Exchanges,” where small businesses will be able to pool together to buy insurance, are set-up by individual states. The immediate tax credits are to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. Total HR is present for clients and potential clients to help clarify how these new tax guidelines apply to your business.
For the next four years, businesses with 10 or fewer full-time employees earning less than $25,000 a year on average will be eligible for a tax credit of 35% of health insurance costs. The subsidies shrink as companies’ size and average pay rise. Companies with between 11 and 25 workers and an average wage of up to $50,000 are eligible for partial credits. In this challenging economy, Total HR recognizes the need of every small company to do more with less and take advantage of all opportunities that help your business.
All of these tax credits will remain in place, increasing to 50% of costs, for the first two years a company buys insurance through its state exchange. The Congressional Budget Office predicts that the tax credit will affect about 12% of individuals covered via the small-group insurance market, lowering their cost of insurance by between 8% and 11%.
The following table will assist you in determining whether your company is eligible for the tax credit.
Please Click On The Image To See The Chart In Detail….
Healthcare Tax Credit Eligibility Chart
In general, the tax credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low- and moderate-income workers. Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. The importance is to take advantage of the tax credit to improve your profitability and productivity.
For tax-exempt organizations, the IRS will provide further information on how to claim the credit. Total HR will guide our clients, including the nonprofit companies, through the tax credit process, making sure that as much money is saved as possible while maintaining the long-term integrity of their business
