Under the recently-enacted Affordable Care Act, qualified small businesses and tax-exempt organizations will be able to claim a health care tax credit.  This new credit is designed to help small employers afford the cost of covering their employees and is specifically targeted for those with low- and moderate-income workers.  The credit is available beginning in 2010, and it applies to health, dental and vision benefit premiums.  Generally, eligibility for the credit is limited to small employers with fewer than the equivalent of 25 full-time workers and average annual wages of less than $50,000.  The credit only applies to employers that pay for at least 50 percent of single insurance coverage for their employees.  It is worth up to 35 percent of a small employer’s premium costs, and phases out gradually for employers with average wages between $25,000 and $50,000 and for employers with the equivalent of between 10 and 25 full-time workers. 

 

To determine whether you qualify for the tax credit, please visit the IRS website at the following link: http://www.irs.gov/pub/irs-utl/3_simple_steps.pdf.  If you have questions regarding this credit and whether it is available for your business, please contact an MBA Human Resources Manager at 1.888.622.6460.