Congressman Joe Baca (D-Rialto) said today that companies eligible for new health reform tax credits will be getting a postcard explaining the credits and encouraging them to take advantage of the tax cut. Beginning this week, the IRS is mailing more than 4 million postcards to small businesses around the country to ensure that they realize they may qualify for the new tax credit immediately.
"The recently enacted health reform legislation includes the biggest health care tax cut in history," said Rep. Baca. "It is important for small businesses in the Inland Empire to know this tax relief is out there, so they can begin to take advantage of it immediately."
The health reform tax credit is available to small businesses with 25 or fewer employees and an average wage of $50,000 or less that provide health insurance for their employees. Companies with 10 or fewer employees and an average wage of $25,000 or less get the maximum credit--35% of what the employer is paying for employee insurance coverage. The maximum credit rises to 50% in 2014.
The tax credit is also available to small non-profit organizations. For non-profits, the tax credit is worth up to 25% of what the employer is paying for employee insurance coverage. The maximum credit for non-profits rises to 35% in 2014.
"There are more than 502,000 small businesses in California that meet the criteria for the tax credit," said Rep. Baca. "This is going to make it a little easier for companies already offering insurance to afford it and will allow more small businesses to start providing health care coverage for their workers. The extra money this tax credit provides will also give small businesses much needed assistance to weather these tough times, and will help to stimulate local economic growth."
The tax credits are available now, beginning with this tax year.
For more information from the IRS on small business health reform tax credits, visit http://www.irs.gov/newsroom/article/0,,id=220839,00.html.