I like writing, but dislike the concept of blogging. It seems too self-centered—like everyone in the world is interested in my viewpoint. But it seems like the best possible way to distribute information to Tompkins Chamber members and people in this community about the Patient Protection and Affordable Care Act (PPACA—the Health Care Act).
So, first, here’s information about the health care tax credit for small employers. From 2010 through 2013 there is a tax credit for qualified small employers, who purchase health insurance for their employees. You are qualified if you employ no more than 25 full-time equivalent (FTE) employees during the tax year AND pay average FTE annual wages of no more than $50,000 AND have a health insurance plan for which the employer pays at least 50% of the premiums of those enrolled.
For 2010 the credit is 35% for for-profit and 25% for tax-exempt employers of the lesser of the amount the employer spent to purchase health insurance OR an amount to be named later. Seriously! The Secretary of Health and Human Services will benchmark an amount and this will be made public by the IRS at some point later this year.
But I’m not finished yet. The full amount of the tax credit only applies to employers with 10 or fewer FTE employees who average annual FTE wages of less than $25,000. There are also provisions for 2014 and later for employers who purchase their insurance through an insurance exchange (more about these in a future blog).
This is a wonderful tax credit. It could mean a good savings for small businesses and, if employers understand the provisions, it could spur increased employment. But, it also means that you better have a good accountant. I’m still not sure how the credit will work for not-for-profit businesses, like the Chamber, since we don’t generally pay income taxes. I’m told that there will be either a credit on another tax or a refund.
More later. There will clearly be more to blog about. The bill, PPACA, is about 2,000 pages long.
As always, don’t rely on this for tax advice. See a qualified accountant.