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Small Business Tax Credits March 24, 2010

Posted by solutionsinsuranceservices in Uncategorized.
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Recently, I’ve received a large number of questions regarding the small business tax credits provision in the new healthcare reform law. Trying to put it in simple terms, the law provides small businesses with NO MORE than 25 employees, and an average annual salary of LESS THAN $50,000 that purchase health insurance for employees, a tax credit. In tax years 2010 through 2013, if the employer pays at least 50% of the employee’s premium, or of a benchmark premium, they will receive a tax credit up to 35% of their share of the premium. You may ask, what is a “benchmark premium?” That is a good questions which, of course, has not been defined as of yet. As soon as I get that answer, I will share it with you.

For those employers with fewer than 10 employees and an annual average salary of less than $25,000, they will receive full credit for any premiums paid on behalf of the employee.

The credits phase out as firm size and wages increase. For those tax exempt small businesses that meet the size and salary requirements of the law, they will receive a tax credit of up to 25% of the employer’s contribution toward the employee’s health insurance premiums.

Things change in 2014, and I’ll report on those changes as we get closer.



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