Today Congressman Maffei visited Coleman's Pub in the Tipperary Hill neighborhood in Syracuse to discuss the tax credits that small businesses can receive for offering health care coverage to their employees. Coleman's already offers health care coverage to their employees, and under the new health care legislation, they meet the criteria for a small business tax credit. Beginning in 2010 and through 2013, businesses with fewer than 25 full-time employees that contribute at least 50% of the total premium will be eligible for tax credits of up to 35% of the employer contribution.
Also, in 2014, small businesses will be able to pool together and shop in the insurance "exchange" for a plan that best meets their needs, reducing costs even further. Eligible small businesses purchasing coverage through an exchange will receive tax credits of up to 50% of the employer contribution if the employer provides at least 50% of the premium cost.
Congressman Maffei said: "It was great to visit Coleman's today and talk with Peter Coleman about the importance of health insurance for employees. This bill is going to provide tax credits for his business and others like Coleman's -- that is going to help their bottom line and strengthen our economy."
Today the IRS also announced they will begin their outreach effort to small businesses to inform them of their options for health insurance coverage for employees. See below for more information on the IRS outreach efforts.
IRS Reaches Out to Millions of Employers on Benefits of New Heath Care Tax Credit
April 19, 2010
IRS Public Contact: 800.829.1040
IRS Media Contact: 202.622.4000
WASHINGTON ― The Internal Revenue Service this week began mailing postcards to more than four million small businesses and tax-exempt organizations to make them aware of the benefits of the recently enacted small business health care tax credit.
Included in the Patient Protection and Affordable Care Act approved by Congress last month and signed into law by President Obama, the credit is one of the first health care reform provisions to go into effect. The credit, which takes effect this year, is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
"We want to make sure small employers across the nation realize that ---- effective this tax year ---- they may be eligible for a valuable new tax credit. Our postcard mailing ---- which is targeted at small employers ---- is intended to get the attention of small employers and encourage them to find out more," said IRS Commissioner Doug Shulman. "We urge every small employer to take advantage of this credit if they qualify."
In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and moderate income workers.
For tax-years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. The maximum credit goes to smaller employers ---- those with 10 or fewer full-time equivalent (FTE) employees ---- paying annual average wages of $25,000 or less. The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more. Because the eligibility rules are based in part on the number of FTEs, not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals. The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more.
Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt organizations, the IRS will provide further information on how to claim the credit.
View the postcard.
View Information on state-by-state distribution of the postcard.
More information about the credit, including a step-by-step guide and answers to frequently asked questions, is available on the IRS Web site, IRS.gov.