Some small businesses look forward to health care tax credits

Word of new tax credits for some small businesses continued to make the rounds in news reports this weekend, as business owners seek to make sense of it details.

The (Vancouver, Wash.) Columbian: "Clark County small businesses could get back up to 35 percent of the money they pay into health insurance premiums this year. But many owners are so focused on their daily operations — or so overwhelmed by the complexity of federal health care reform — that they have not yet looked into what the Patient Protection and Affordable Care Act means for them. The law, passed by Congress and signed by President Obama in March, is mind-numbingly complex. The bulk of it doesn't take effect until 2014. But here's what small-business owners need to know now: An employer that pays annual health insurance premiums of $10,000 per worker could get back up to $3,500 in tax credits for each covered employee." Not all businesses will qualify (Corvin, 8/29).

The (Biloxi, Miss.) Sun-Herald: "To be eligible for the credit, employers must cover at least 50 percent of the cost of health care coverage, have less than the equivalent of 25 full-time employees and pay average annual wages below $50,000. Both taxable and tax-exempt organizations may qualify, but nonprofit organizations that are tax-exempt will be eligible for a credit of only 25 percent of health care costs. There is also a gradual phaseout of the amount of credit a business will receive when employers have over 10 full-time workers or pay more than $25,000 in average annual wages" (Dow, 8/28).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.