The Affordable Care Act: Small business tax credits

While President Obama's healthcare reforms are facing legal challenges from a number of States, including Georgia, the Federal government is pressing ahead with its PR campaign to win hearts and minds.

The Federal government claims that its Small Business Tax Credits provision will benefit 123,000 small Ga. firms through a tax credit. This is designed to help level the playing field between small and large business. The Federal government estimates that, on average, small firms pay 18% more for their health insurance coverage compared to large firms.

For example, If you have up to 25 employees and pay average annual wages below $50,000; if you provide health insurance, you may qualify for a small business tax credit of up to 35% to offset the cost of your insurance.

This is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage when under pressure to reduce or cancel health benefits. According to the IRS, "In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees".