HEALTH CARE REFORM: Small Employer Tax Credits
Small businesses will be eligible for Health Care Affordability Tax Credits worth up to 35% of their contribution to their employees' health insurance plans starting in 2011 (2010 tax year). If you choose to offer coverage, the purpose is to make employee coverage more affordable.
The definition of a small business in one who employes no more than 25 full-time employees with an average full-time annual wage of less than $50,000.
About 248,715 small businesses in New York are potentially eligible for premium tax credits. This is more than any other state.
DETAILS
~ To qualify, the business must have less than the equivalent of 25 full-time workers.
~ The business must pay average annual wages of less than $50,000 and provide qualifying coverage.
~ The full credit is available to firms with average wages below $20,000 and less than 10 full-time workers.
~ The size of the credit depends on your average wages and the number of employees you have.
~ The buisness must pay at least 50% of the employee premium costs.
~ Employers will not be eligible to use the credit for certain employees including defined "seasonal workers," self-employed individuals, 2% shareholders of an S corporation, or 5% owners of a small business.
Speak further with a tax advisor for more guidance.
For more information on the health care reform bill go to www.healthreform.gov
Resources: National Association of Health Underwriters, the Henry J. Kaiser Family Foundation, and www.healthreform.gov
This information is provided for educational purposes only and does not constitute legal advice.
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