Small business owners throughout the nation are struggling, unable to provide health care coverage for employees. However, some may be getting some help from the federal government in the form of tax credit.
The Small Business Health Care Tax Credit, which is part of the Patient Protection and Affordable Care Act passed by Congress in March, is hoped to help small businesses by providing those eligible with a tax credit of up to 35% of health care premium costs.
According to Dee Stepter, an IRS spokesperson, this new tax credit is really targeted to small employers.
The credit will help alleviate some of the rising health care costs and help business owners provide their employees with health insurance coverage.
Eligibility requires employers to cover at least 50% of health care coverage, have less than 25 full-time employees, and pay average annual wages below $50,000. Taxable and tax-exempt organization can qualify, but nonprofit organizations that are tax-exempt will only be eligible for a credit of 25% of health care costs.
Additionally, there is a gradual phase out of the amount of credit business can receive when employees have over 10 full-time workers or pay more than $25,000 in average annual wages.
In 2014, the tax credit will increase to 50 percent of health care premium costs for small businesses and 35 percent for tax-exempt organizations.
