New Small Business Tax Credits

The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010. The Patient Protection and Affordable Care Act, was passed by Congress and was signed by President Obama on March 23, 2010. Source: IRS.gov, updated March 31, 2010.

Starting in 2010, up to 4 million small businesses that offer healthcare coverage to their employees may be eligible for a tax credit. Fill in the amounts below to find out what your tax credit will be.

To qualify, a small business must:

Have fewer than 25 full-time equivalent employees

Pay average annual wages below $50,000 per FTE

Contribute at least 50% of each employee’s premium

Notes:

Owners are excluded, and should not be counted in number of employees, wages, or premium contribution amount.

Tax credits can’t be larger than actual income tax liability.