The United States government believes that health care is a basic need that must be accessible to everyone
. A new chapter in health care became possible on the later part of 2009 when the Obama administration and the Democratic Congress approved the Affordable Health Care for America Act. Enactment of this law happened on March of 2010. This law actually packs many different tax provisions. Small businesses get benefits from these provisions through the health care tax credit. In fact, small businesses in Arizona highly consider this health care tax credit.
Small business owners get tax incentives with the Small Business Health Care Tax Credit. As a result, they can now provide group health insurance to their employees. Business owners with 10 or fewer employees can be encouraged to provide new coverage or maintain existing coverage to employees who are usually within lower tax brackets with this incentive. Credit of up to 35 percent of the premium's costs to offset their tax liabilities annually from 2010 until 2013 can be given to small business owners who pay for at least 50 percent of the health insurance costs of their employees. The following three simple steps can help one in determining if a small business can qualify for this type of tax credit.
1. Determine the total number of your employees without counting its owners or family members.
Calculate the number of employees who works full-time or at least 40 hours per week. Then, calculate the number of full-time equivalent of part-time employees by dividing the total annual hours of part-time employees by 2080. Add the two and youll get the number of the total employees.
If the total number is lesser than 25, proceed to step 2.
2. Calculate the average annual wages of employees without counting its owners or family members.
Determine the annual wages paid to employees. Divide the annual wages to the number of employees.
If the result is less than $50, 000, proceed to step 3.
3. If the small business owner pays for at least half of the insurance premiums for the employees at the single (employee-only) coverage rate, then you can file a Small Business Health Care Tax Credit to the Internal Revenue Service (IRS).
This kind of tax credit is quite new. Small business owners may hardly understand some things about it. Consulting an Arizona Tax Lawyer is always the best option if you need one to guide you through the whole process.