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Get your Small Business Health Care Tax Credit

December 14, 2010 Leave a comment Go to comments

Affordable Health Care for America Act

Did you know how to get the new small business health care tax credit? This benefit from the recently passed Affordable Care Act can make a big difference in keeping the cost of business down. The following is excerpted from an open letter written by Karen Mills from the Small Business Administration.

“The most immediate benefit of the Affordable Care Act is a tax credit that will help America’s smallest employers…who have been hit hardest by premium increases in recent years.  Today, the Administration is releasing a one-page form and instructions (available here) on how to claim this credit for the 2010 tax year. …In each case, the Administration has worked to ensure that a broad range of small businesses can qualify.

These credits are available for tax years 2010 through 2013 and for any two years after that.  Through 2013, the maximum tax credit is 35 percent of premiums paid by small employers and 25 percent for eligible tax-exempt organizations.  Beginning in 2014, those levels increase to 50 percent and 35 percent, respectively.  Importantly, these credits are just one of many benefits in the Affordable Care Act.  Most notably, in 2014, firms with up to 100 workers will be able to pool their buying power and reduce their administrative costs by purchasing coverage through a health insurance exchange.

Finally, the new law strengthens America’s entrepreneurial spirit, overall.  For example, it outlaws discrimination against those with pre-existing conditions, giving more Americans the ability to break out of “job lock” and start their own companies.  The new law also prohibits insurance companies from dramatically increasing premiums for a small business just because one worker gets sick.

Overall, the Affordable Care Act is a critical tool that will help millions of small business owners provide health insurance to people who you often consider to be members of your extended family – your employees.  As a nation, we owe you nothing less as you work to grow, create jobs, and lead us toward full economic recovery…”

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