April 22nd, 2010 – There is good news for small companies that offer health insurance to employees. The IRS just released information about the new small business health care tax credit for 2010. The tax credit is a provision of the landmark Health Care Reform law, the Patient Protection and Affordable Care Act (PPACA).
The new tax credit is designed to encourage small groups to offer health care coverage for the first time or help them maintain the coverage they already have. It is expected to provide assistance to roughly four million small businesses.
To qualify for the credit, employers must have fewer than 25 employees and the average annual compensation of those employees must not exceed $50,000.
In 2010, the maximum credit is 35% of employer-paid premiums. For tax-exempt organizations, the maximum credit is 25% of employer-paid premiums. In 2014, the maximum credit increases to 50% of employer-paid premiums and 35% for for tax-exempt organizations.
Here is the IRS’s IRS3steps to determine eligibility and you can visit this IRS web page for more detailed information about the new health insurance tax credits for small businesses.
