Small businesses can avail of the health care tax credit beginning 2010.
Eligibility.
To be eligible for the tax credit-
• A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
• A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
• A qualifying employer must pay average annual wages below $50,000.
• Both taxable (for profit) and tax-exempt firms qualify.
Maximum Amount.
The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
Phase-out.
The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.