“Feb. 17–President Obama’s proposed budget includes expanded tax credits to help small businesses pay for health insurance under the Affordable Care Act, the White House said Thursday.
For tax year 2011, the existing tax credit will benefit an estimated 360,000 small employers who provide health insurance to two million workers.
The expanded tax credit would benefit nearly half a million employers who provide insurance to 4 million workers.
For example, a small business with 15 full-time employees, an average wage of $35,000 and an employer premium contribution of $6,000 would be eligible for tax credits of $18,900 in 2012 and $27,000 in 2014, under the President’s proposal. That compares to tax credit eligibility of $8,400 in 2012 and $12,000 in 2014 under current law.
“Improving this provision will let more small businesses take advantage of an important tool to help rein in health care costs,” said John Arensmeyer, founder and CEO of Small Business Majority. “What’s good for small business is good for the economy. Expanding the tax credit would save more small businesses money, which will do even more to stimulate our economic recovery.”
Its polling found 57 percent of small business owners do not know the credits exist, Small Business Majority said.
Over the next 10 years, the proposal would provide an additional $14 billion in tax credits and it would simplify the process for qualifying.