April 12th, 2012 – With tax day looming, many small businesses with employer sponsored group health insurance plans may be eligible for a significant federal tax credit in 2011. This business tax credit is one of the provisions of the Patient Protection and Affordable Care Act, better known as Healthcare Reform.
The tax credit is available to businesses with fewer than 25 full-time employees and with average wages less than $50,000. The tax credit can be as high as 35% of the premium paid by the employer, if the employer paid at least 50% of the employees premium. Full time employees are considered those who work 40 hours per week for 52 weeks out of the year. For part-time employees the tax credit is reduced appropriately.
The tax calculations and requirements are fairly complex so be sure to consult with a tax professional about any questions and for your specific calculations.