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Tax Provisions in the Health Care Act

Mr. T

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Small Business Tax Credit

The act provides tax credits for small businesses and individuals designed to increase levels of health insurance coverage, as part of the IRC § 38 general business credit. Small businesses—defined as businesses with 25 or fewer employees and average annual wages of less than $40,000—would be eligible for a credit of up to 50% of nonelective contributions the business makes on behalf of their employees for insurance premiums (new IRC § 45R). Tax-exempt organizations would get a 35% credit against payroll taxes.


Employers with 10 or fewer employees and average wages of less than $20,000 would get 100% of the credit; it would be phased out, up to the 25-employee limit. The $20,000 average annual wages figure will be indexed for inflation after 2013. Five-percent owners under the section 416 top-heavy plan rules and 2% S corporation shareholders are not included in the definition of employee, but leased employees are counted.


This credit is available for tax years beginning after Dec. 31, 2009.







Can you see how trying to keep the averages under the Big Brother guidelines will come into play?


The Federal Minimum Wage is at $7.25 So lets see if I did the math correct here.


Lets say the owner and his spouse are both working the business and are all ready earning $80,000.00 per year between the both of them, that will leave $15,000 per employee if they have 8 employees they will earn $15,080.00 per year at Min. wage. Well they will already be over the limits to get the tax credit. So the alternative would be to layoff one employee or cut their own pay.


Heaven forbid that you would want reward an employee with a raise for being a good worker and still keep the Tax credit.


So in reality Obama has used insurance as a tool to control all wages for everyone.

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So do we have any accountants or bookkeepers who can see how big of a Farse the Obama Health Care Tax Credit is.



And who said that this wont hurt small businesses?



This creates another burden on the self employed and the small business owners.



I bet Obammy is feeling the pain of all tose who are collecting unemployment, while him and the rest of his cronies have just made it harder for employers to hire and maintain full time workers, while at the same time for them to try and stay competitive.



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