Under the Affordable Care Act, President Obama has proposed a budget which includes expanded tax credits to help small businesses pay for health insurance.
For the tax year 2011, the existing tax credit benefits approximately 360,000 small employers, who provide health insurance to 2 million workers. The expanded tax credit would now benefit nearly half a million employers who provide insurance to 4 million workers.
AdvertisementFor example, under the President's proposal, a small business with an average wage of $35,000 and 15 full-time employees and an employer premium contribution of $6,000 would be eligible for tax credits of $18,900 in 2012 and $27,000 in 2014. That compares to tax credit eligibility of $8,400 in 2012 and $12,000 in 2014 under current law.
Improving this provision will let more small businesses take advantage of an important tool to help rein in health care costs. Expanding the tax credit would save more small businesses money, which will do even more to stimulate the economic recovery. 57% of small business owners do not know the credits exist.
Over the next 10 years, an additional $14 billion in tax credits would be provided by the proposal and it would simplify the qualifying process.