Yarmuth: More than 52,000 Kentucky Businesses - including 15,000 Louisville Companies - to Be Notified of Health Care Tax Credits
(Washington, DC) Today, Congressman John Yarmuth (KY-3) announced that more than 52,000 Kentucky businesses will soon receive information in their mailboxes about new tax credits they are eligible for as part of the health care reform legislation approved last month.
“Small businesses are the engines of job creation in our community, but they’ve been burdened by outrageous health insurance costs for too long, said Congressman Yarmuth. “The new health care reform law has something to benefit nearly every American, but it is specifically helpful to small businesses. It is my hope that more than 15,000 Louisville small business owners who are now eligible for tax relief will take full advantage of the biggest health care tax cut in American history.”
Postcards from the IRS explaining the new tax credits and how business owners can take advantage of them are being mailed to 4 million companies across the country starting this week. View the postcard.
As part of the Patient Protection and Affordable Care Act approved by Congress in March, the small business tax credit is one of the first provisions of health care reform to go into effect. The credit is designed to encourage small businesses to offer insurance coverage for the first time or maintain existing coverage choices.
The tax credit is available to companies with 25 or fewer full-time employees and an average wage of $50,000 or less. Companies with 10 or fewer full-time employees and an average wage of $25,000 or less qualify for the maximum credit – which is equal to 35 percent of what the employer is paying for insurance coverage. The maximum credit rises to 50 percent in 2014. The eligibility is determined based on the number of “full-time equivalent” employees, so businesses that hire part-time employees may qualify even if they employ more than 25 people.
Small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011.
Employers can determine whether or not they qualify using the simple process found here.
Also see more information about the credit and answers to frequently asked questions.