WOODBURY – The IRS issued new guidance on the tax credits available to small businesses that offer health coverage for their employees, which Congressman Bart Gordon hailed as good news for roughly 85 Cannon County small businesses that may be eligible.
“These tax credits will make it easier for small businesses to provide health care coverage and retain good employees at a time when budgets are tight,” Gordon said. “The new guidelines will help small businesses get the maximum benefit from these credits.”
Tax credits are available for the 2010 tax year 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 are eligible for the maximum credit—35 percent of what the employer is paying for employee insurance coverage. The maximum credit rises to 50 percent in 2014.
The guidelines issued this week clarify that small businesses can receive the credit for add-on dental and vision coverage, as well as traditional health coverage. The tax credit will not be reduced if the business also receives a health care subsidy from the state, such as CoverTN. Businesses with a mix of full-time and part-time employees will also have options to maximize their eligibility for credits.
Gordon noted that, while new health insurance reforms do not require small businesses of less than 50 employees to offer health care coverage, the widely-available credits will provide a broader economic boost.
“Small businesses employ more than 95 percent of Tennessee’s private workforce, so these credits are good news for our local economy,” Gordon said. “Cannon County depends on its small businesses, and I encourage all business owners to stay informed about these and other available tax credits.”
The small business health insurance tax credits went into effect this year as part of the health insurance reform bill. In addition to creating tax credits, the bill aims to bring costs down for small businesses by allowing individuals to buy policies across state lines and providing access to large purchasing pools. For more information about what the bill means for small businesses, visit www.house.gov/bart.