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Most MN small businesses eligible for healthcare tax credits

Healthcare_Tax_cred_hed_finalcut_20100816.mp33.76 MB
A report released last month shows that the majority of Minnesota’s small businesses are eligible for healthcare tax credits under the new national healthcare reform law. The report, “A Helping Hand for Small Businesses: Health Insurance Tax Credits,” was released by Families USA and Small Business Majority, and says that nearly 78,000 Minnesota small businesses, or about 84 percent, qualify for the tax credits.
The tax credit program is a key element of the national heath care overhaul bill passed in March of this year, the Patient Protection and Affordable Care Act, and targets small employers with up to 25 workers.  On average, small businesses pay about 18% more than large firms for the same health insurance policy, in part because larger companies can pool risks.  The tax credits are designed to offset these differences and make it more affordable for small businesses to provide employees with health insurance. 
The value of the small business healthcare credit this year (until 2014) is up to 35 percent of the employer’s costs for employee coverage. The smallest firms with the lowest wages—those that employ 10 or fewer workers who earn an average wage of less than $25,000—are eligible for the full 35 percent tax credit.  The new law also allows employers to count two half-time workers as one full-time worker, meaning that an employer with mainly part-time workers will be able to qualify for the tax credit.
Starting in 2014, small employers will be eligible for tax credits of up to 50 percent to cover their workers with policies obtained through state-based health coverage marketplaces called “exchanges.”
The report, “A Helping Hand for Small Businesses: Health Insurance Tax Credits,” is available on the Families USA website. More information about small business healthcare tax credits is also available on the IRS website