Healthcare tax credit for small businesses

Healthcare tax credit

According to two advocacy groups, more than four fifths of small businesses in New York will be eligible for a healthcare tax credit. However the businesses say that the new rules don't encourage growth and that the provisions in the healthcare reform bill will cost them.

Reports state that small businesses that cover at least 50 percent of each employee's health insurance premiums will receive up to 35 percent of the average cost of a small group plan in the state as a tax credit. The business can employ up to 25 full-time equivalent people, including the owner, with average wages of less than $50,000.

Businesses with 10 or fewer employees with average wages of less than $25,000 are eligible for the full amount.

Speaking about the measures, John Arensmeyer, founder and chief executive officer of Small Business Majority, said, "Healthcare is the single biggest issue facing small businesses in this country."

"In passing the tax credit, Congress sought to provide immediate benefits to small businesses starting this year."

According to the report released Tuesday, 81.6 percent, or 285,000, of the 349,500 small businesses in New York are eligible for the credit and 78,300 businesses in the state are eligible for the full amount. Nationwide, 83.7 percent, or 4 million, of 4.8 million small businesses are eligible.

The tax credits are available for 2010 through 2013. In 2014, each state will have exchanges, which will give business owners easy comparisons among and enrollment in plans. Then the credit will increase to 50 percent for those who enroll through the exchange for two years.

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