"NEWS NOTES"
From the office of Angle, Zaebst & Associates |
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Health Care Reform
My Small Business - how will it effect us?
Source: U.S. Chamber of Commerce |
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In 2010, a temporary small business tax credit is available for some companies who provide qualified health coverage. However, the credit puts small business owners through a series of complicated tests to determine the actual amount of the credit.
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Only businesses with fewer than 10 (full-time equivalent) employees will receive the full credit. In 2010, full credit is 35% of qualified premium costs. Owners and their family members are not included in the calculation of full-time equivalent employees.
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Only businesses who pay their workers an average wage of $25,000 or less are eligible for the full credit. Owners and their family members are not included in the calculation of average annual wage.
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Only businesses covering 50% or more of their employees insurance costs will be eligible.
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The credit is only available for a maximum of six years.
There will be changes to the rules regarding Health Savings Accounts.
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Consumers are prohibited from using HSA and FSA funds to purchase non-prescribed items, including over-the-counter medication with the exception of insulin.
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The penalty for using HSAs for non-qualified purchases increases to 20% . At this time, the penalty is still 10%.
We will continue to keep our clients informed about relevant changes resulting from the recent Health Care Reform. As always, there can be good and bad with tax law change, and we will do our best to prepare our clients for both. Please click on the quick link above entitled May 11, 2010 Tax Briefing. See the article entitled IRS ramps up guidance on new small employer health insurance tax credit featured on our website for more information. |
