Tax Credit Makes Health Insurance More Affordable for Small Business

04/04/2010

Small businesses struggling to obtain affordable health insurance options may turn to the Internal Revenue Service for relief.

A release from the service pointed to a tax credit recently included in the Patient Protection and Affordable Care Act, which was approved by the federal government in March.

"This credit provides a real boost to eligible small businesses by helping them afford health coverage for their employees," said IRS Commissioner Doug Shulman. "We urge small businesses and tax-exempt employers to look closely at this important tax break - which is already effective - to see if they qualify."

The largest credits go to employers with 10 or fewer full-time employees, according to the release. Thirty-five percent of premiums paid by these companies will be covered by the tax credit, while tax exempt organizations will be able to apply for up to 25 percent premium coverage.

Both of these figures are slated to increase in 2014, when many other provisions of the health care reform act take effect. Small businesses and tax exempt organizations that take advantage of the tax credit in 2010 will be able to include it on their 2011 tax returns, according to the release.

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