Congressman Brian Baird (WA-03) today announced good news for more than 10,000 small businesses in the 3rd Congressional District--the Internal Revenue Service (IRS) is offering new details which could make it easier for small businesses to determine whether they are eligible for tax credits under the Patient Protection and Affordable Care Act.
New IRS guidance indicates that 4.4 million small businesses that may qualify for tax credits under the Affordable Care Act will not have their credit reduced by state tax credits. Additionally, eligible small businesses can receive credit for adding-on coverage like dental and vision.
"This is great news for Washington's small business owners," Congressman Baird said. "I am convinced that helping small businesses grow is the key to recharging our economy. Small businesses can now get tax credits of up to 35% of premium costs this year, and up to 50% in just 4 years. These businesses don't have to provide health insurance right now, but being able to provide insurance for your employees is an important tool to keep and recruit new employees."
President Obama signed the Patient Protection and Affordable Care Act into law on March 30, 2010. Effective beginning in tax year 2010, the Affordable Care Act is providing tax credits for millions of American small businesses to help them offer health insurance to their employees -- if they choose to provide coverage.
The IRS announced a number of details of how the tax credit works, including:
* The new tax credit will not be reduced by a state health care tax credit or subsidy (except in limited circumstances to prevent abuse of the credit).
* Small businesses can receive the credit not only for traditional health insurance coverage but also for add-on dental, vision, and other limited-scope coverage.
* Detailed guidance regarding how a small business can determine whether it is eligible and how large a credit it will receive.