Starting today, January 1, 2010, small businesses may qualify for tax credits by giving their employees health insurance coverage. Small businesses can get this tax credit by providing health insurance to their employees. The tax credit they can receive can be as much as 35% of the total premium cost they pay out for the entire year.
To be eligible for the tax credit the business should:
- shoulder at least 50% of the health insurance premium of each employee, with the premium computed based on single rates.
- have at most 25 full time workers or 50 part time workers
- pay at most an average of $50,000 per annum in wages
This piece of news is definitely a win-win situation for employers since it will lower their insurance benefits costs, allowing them to give better benefits to employees, and thus enabling them to recruit and retain higher quality workers.