A new health care tax break for small businesses went into effect Monday May 17, 2010. This is all a part of the grand scheme to reach health care reform goals as well as make it easier for smaller businesses to provide health benefits to their employees, something that was difficult for smaller establishments because of the associated costs.
What the new small business health care tax break will include
Full benefits include that 35% of health care premiums to be paid by Uncle Sam.
Who qualifies for the new health care tax break among small companies?
Full benefits goes to companies with less than 10 employees making less than $25,000 on average. An estimated 1.8 – 4 million companies will be eligible.
Which small companies do not qualify for the new health care tax break?
Sole proprietors do not qualify for the new tax break and neither do businesses with more than 25 employees or businesses where employees make $50,000 or more on average.
What else is there to know about the new small business health care tax break?
- Business owner’s salaries won’t be considered in figuring out the company’s average salary.
- Nonprofits will be eligible to claim a partial benefit
- This health care incentive will expire in 6 years
Who is expected to gain the most
Small companies with 1 – 2 employees and small businesses that are already offering health benefits. Small companies that are struggling to pay for health benefits or with employees who can’t afford to buy their own health insurance will find this benefit helpful which could be the reason many businesses look for short term business cash advance solutions.