Developments in Tax and Business
Small Business Health Insurance Credit
The new health care reform law offers a tax credit to small businesses that provide health care insurance coverage to their employees. The new law allows a small business to claim a federal tax credit of up to 35% of the amount the business spends on health insurance for its workers. The rules are complex, but for a business to qualify for the tax credit, it must have no more than the equivalent of 25 full-time employees and pay them average annual wages of $50,000 or less. The employer must contribute at least 50% of the total premium cost. Business owners and family members aren't considered employees for credit purposes, and premiums paid on their behalf aren't eligible for the credit. A family member is defined as a child (or a descendant of a child), a sibling or stepsibling, a parent (or ancestor of a parent), a stepparent, a niece or nephew, an aunt or uncle, a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.Small Businesses and Job Creation
Firms with fewer than 500 employees accounted for 64% (or 14.5 million) of the 22.5 million net new jobs generated between 1993 and the third quarter of 2008, according to data from the U.S. Department of Labor, Bureau of Labor Statistics.The content contained within this newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used, by you for the purposes of (1) avoiding any penalty that may be imposed by the Internal Revenue Service or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein. Therefore it is important that you seek appropriate advice. If you desire such advice, please contract a member of our firm.
