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Summary of Small Business Tax Credit

Posted May 17 2010 2:39pm
From the Washington Post

"As many as 4 million small businesses might be eligible for federal tax credits to help cover the cost of health insurance for their workers, administration officials said Monday, one of the first benefits to flow from the recently enacted health-care overhaul." However, not all businesses "will be eligible for the credits immediately, because not all of them currently offer insurance, Assistant Treasury Secretary Michael Mundaca said on a conference call with reporters. But all were sent government postcards alerting them to the availability of the credit -- which covers up to 35 percent of their health-care costs -- in hopes of spurring more to offer coverage, Mundaca said." In addition, the Internal Revenue Service earlier today issued "a series of rules clarifying eligibility for the credit, which is available to businesses with fewer than 25 employees and paying an average salary of less than $50,000 a year." The tax credit's value phases out as a small business' number of employees increases and as salaries rise. "[T]he full 35 percent credit available only to businesses with fewer than 10 full-time workers paying an average salary of less than $25,000" (Montgomery, 5/17).
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