Oct. 22, 2010
Tax Credits Available for Some Small Groups
The healthcare reform law was designed to expand health coverage and make insurance easier to buy. One immediate provision in the new law –a small business tax credit -- is designed to help with this mission.
Effective with the tax year beginning Jan. I, 2010, eligible small businesses may qualify for a tax credit to provide health insurance to employees.
The credit is designed to help small businesses and tax-exempt organizations with fewer than 25 full-time equivalent employees that pay wages that average less than $50,000 per employee per year.
The maximum credit is:
The size of the credit depends on the average wages of employees. For instance, the tax credit is worth up to 35 percent of the employers’ healthcare costs for businesses with up to 10 employees and average annual wages of up to $25,000. Beginning in 2014, the maximum credit is 50 percent for eligible employer’s contributions toward premiums.
The tax credits are available retroactive to Jan. 1, 2010 and apply to both grandfathered and non-grandfathered health plans. You can find more information on this tax credit at www.IRS.gov or www.bcbsla.com.
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