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A weekly look at Wyoming business questions from the Wyoming Small Business Development Center, part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.
By Michael Lambert, Wyoming Entrepreneur Market Research Center manager
"What are the immediate impacts of the national health care legislation for my small business?" Kay, Green River
Much of the health care reform legislation does not really kick in for another four years. Some good things on the immediate horizon in the form of a tax credit to offset health insurance premiums will be available to small business owners. This provision of the bill takes force immediately.
Small business owners will join millions of others that will receive a postcard from the Internal Revenue Service (IRS) in the next few months. The card will inform business owners to see if they are eligible for the 2010 tax credit.
Eligible businesses must have fewer than 25 full-time equivalent employees, pay an average annual wage of less than $50,000 and cover at least 50 percent of the cost of health premiums for their workers. Caps on how high the qualifying premiums can be also will be explained. The credit uses a sliding scale with businesses with fewer than 10 employees and average wages less than $25,000, while larger firms and larger payrolls will receive a lower credit.
The credit available for tax years 2010 through 2013 covers up to 35 percent of a company's expenditures on health insurance premiums, increasing to 50 percent in 2014. The credit is available for a maximum of 6 years (2010 through 2015).
If the company is a non-profit, the credit is available as a refund even if the business has no taxable income. For- profit companies must apply the credit to offset actual federal income taxes due for the year, with any remaining credit carried forward to future years.
Some examples from the IRS can be found on its Web site. To learn more, visit the Web site at http://www.irs.gov/newsroom/article/0,,id=220809,00.html
A blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, e-mail email@example.com or write 1000 E. University Ave., Dept. 3922, Laramie, WY 82071-3922.