The new healthcare reform is proving most advantageous for Small Employer groups and Individuals. Small business owners, those with 2-50 employees, have a new tax credit available starting this year that is rather significant. And, it applies to dental, vision, and a few other limited scope coverages as well as traditional health insurance.
The tax credit is available to small employers that pay at least 50% of the premiums for employee coverage; have less than 25 employees; and pay average annual wages of less than $50,000. This includes for-profit businesses and tax-exempt nonprofit organizations. For tax years 2010 to 2013 the maximum credit is 35% of premiums paid by for-profit employers and 25% for nonprofits. In 2014 the credit will increase to 50% and 35% for nonprofits.
The IRS is informing potentially eligible small business groups about this new federal tax credit. Business owners should consult their tax advisor and can also go to the IRS website for additional information, a 3-step worksheet to see if they qualify, and an informational video with frequently asked questions.
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