Don't Forget About the Small Business Health Care Tax Credit

With tax day rapidly approaching, small business owners still have a chance to cash in on a health care reform provision reserved just for them: health care tax credits. The Affordable Care Act was designed to address one of small business owners' most serious problems -- a lack of access to affordable coverage. Since its enactment, employers across the country have been able to claim the credit and reinvest in their business. Nan Warshaw, owner of Bloodshoot Records in Chicago, Illinois, is one of them.

Nan was able to save nearly $6,000 with the Affordable Care Act's small business tax credit in 2010, helping offset her group coverage cost. "We're still filing our 2011 returns, but we anticipate saving nearly that amount again," she said. "With us paying the full contributions for our employees' insurance, it really is a relief to get some help with those costs -- and this is certainly the first time we've been financially rewarded for looking out for their wellbeing."

Nan is one of hundreds of thousands of employers already seeing her health care costs decrease with the help of the tax credits. According to national opinion polling we released in 2011, one-third of small business owners who currently don't offer health coverage are more likely to start doing so because of them, and 33 percent of employers already offering it said they're more likely to continue doing so.

Currently, businesses with fewer than 25 full-time employees who pay at least 50 percent of total premiums are eligible for a credit of up to 35 percent of their premium contribution. In 2014, that will jump to 50 percent. For a rough estimate of how much your business could save, check out Small Business Majority's tax credit calculator.

In this tough economy small business owners are struggling to compete, and in some cases, just keep their doors open. Like some of the law's other key components, the tax credits are intended to boost entrepreneurs' bottom lines, bettering their chances of offering quality coverage. Some use it to become more competitive by bulking up benefits packages, while others purchase new equipment. Still others put it toward their employees' share of premiums.

For Ron Nelsen, owner of Pioneer Overhead Door in Las Vegas, Nevada, the credit eased worries that group costs might spiral so far out of control that he'd be robbed of his commitment to offering insurance. "When I heard about the new health care law, I was relieved something was finally being done to help entrepreneurs like me," he said. "In 2010, I got back $2,235 just for offering insurance to deserving employees. And this year, I received even more. Most importantly, I'm not thinking about having to tell the guys they're on their own when it comes to health insurance."

Nationally, 309,000 small businesses saved money through this provision in 2010. An even larger number should benefit this year. And research shows the uptake could be even greater. Our opinion poll found 57 percent of small business owners do not know about the tax credits. It's time to change that. To help them, we must get the word out and do everything we can to make sure this important provision is taken advantage of. In this economy, every little bit helps.

John Arensmeyer is the founder & CEO of Small Business Majority

 

Follow John Arensmeyer on Twitter: www.twitter.com/SmlBizMajority

Comments

[WI Patriot]

11:45 AM on 04/13/2012

ROFL what small business with less than 25 employees can afford health insurance - much less pay 50% of the premium?!? when they did not recieve federal subsidies and grants like the businesses cited?

[Bart DePalma]

10:53 AM on 04/13/2012

How is corporate welfare financed by borrowing money at interest from China a good thing for the economy?

[PROGRESSISGOOD]

01:00 PM on 04/13/2012

We are not borrowing from China, we are borrowing from the Mitt Romney's in America. You see, what the rich used to pay in income taxes before the Reagan tax cuts they now lend to us instead at interest.

[Terry T]

02:31 PM on 04/13/2012

You are wrong. The Fed through QE has bought 70% of Treasury issues over the last year, Foreigners bought most of the remainder, followed by pension funds, mutual funds and securities firms (less than $100 billion of the $1 trillion increase year-over-year). Households -- of which the rich are a part -- were net sellers of Treasury securities, as were state and local governments and banks. I am sure you wish to link everything to the Republican tax cuts but try another culprit. It may be refreshing. It would be interesting to hear your rationale that the rich really want to soak America by buying Treasury securities that yield so little. Do you think Romney is buying 5-year bonds at a yield of 0.85%?
http://www.thefiscaltimes.com/Columns/2012/04/04/The-Feds-IOUs-Can-Cripple-the-Economy-in-2013.aspx#page1

[bave]

08:15 AM on 04/13/2012

Great, thanks.

Here is a $10,000 tax credit for spending $100,000 of which $20,000 is directly responsible to ACA's new insurance requirements.

Gee, thanks.

[Terry T]

02:33 PM on 04/13/2012

You don't understand. HP math tells you it's a good thing.

Of course, NFIB membership loathes ACA. But, hey, what do small businesses know about running small businesses?