The tax creditâ€™s value depends on a companyâ€™s size and average wage. Businesses with 25 full-time employees or more arenâ€™t eligible for the credit. Neither are businesses that, on average, pay their employees more than $50,000 a year. The full value of the creditâ€”35 percent of a companyâ€™s premium costsâ€”is available only to businesses with 10 or fewer full-time employees and an average wage of $25,000 or less.
The full value of the credit increases to 50 percent in 2014, when small businesses and individuals will be eligible to purchase coverage through new state-based insurance exchanges. The tax credit could disappear after 2015, however. The law allows eligible small businesses to claim the credit from 2010 through 2013, and then for any two years after that.
(From a Portfolio.com article)Â Â “…the owner of Hawthorne Auto Clinic in Portland, Oregon, expects to save $10,000 to $12,000 a year on his companyâ€™s health insurance costs thanks to the tax credit. He hopes to use that savings to give raises to some of his nine full-time employees. Houser hasnâ€™t been able to increase their pay in recent years because of the rising cost of health insurance. He wants to â€œshow that theyâ€™re appreciated,â€ he said.
Other small-business owners are just beginning to look at how health care reform will affect them. Many of the changes wonâ€™t go into effect for a few years, but the tax credit is available now. White House officials estimate that 4 million businesses qualify for this tax break, and theyâ€™re promoting it through Web chats, postcards to small businesses from the Internal Revenue Service, and workshops around the country.
Ever since the bill became law last month, â€œthereâ€™s been a real hungerâ€ for information about whatâ€™s in the bill, said John Arensmeyer, CEO of Small Business Majority, an organization that supported the legislation. Arensmeyerâ€™s organization has created a tax credit calculator that businesses can use to determine how much moneyâ€”if anyâ€”they can save through the tax credits.
Read more: http://www.portfolio.com/business-news/2010/04/19/businesses-seek-answers-on-health-reform-tax-credit#ixzz0laBXx72m