Employers with 25 or fewer workers now eligible for a 35% Federal income tax credit.
In 2010, employers with 25 or fewer workers with an average annual wage of less than $50,000 per employee are eligible for a Federal income tax credit. Employers with 10 or fewer employees with an average annual wage of less than $25,000 per employee are eligible to receive the maximum tax credit of 35%. Non-profit employers may receive up to a 25% tax credit. The employer must contribute 50% or more of the employee’s share of premium costs. Contributions for employee’s dependents and spouses are not included.
These Federal tax credits will stay in effect until 2014 when the law requires that insurance exchanges be established in each state. These government-regulated exchanges will provide a marketplace where individuals, self-employed and businesses can buy health insurance coverage. Small businesses that sign up with one of these exchanges can receive a tax credit of up to 50% or their costs. In 2015 the tax credit disappears.
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