The IRS has issued guidance to help small business owners make sense out of tax changes included in the monumental health care legislation. (IRS News Release IR-2010-38)
Strategy: Protect against rising costs with a special tax credit. The credit can potentially offset up to 35% of the health insurance premiums your business pays.
Although many provisions in the new health care law are prospective, the small business credit is available in 2010. The new IRS guidance explains how the rules work in the form of frequently asked questions (FAQs).
Here’s the whole story: Under the new health care law, a small business is potentially eligible for credit for contributions used to purchase health insurance for its employees. To qualify, the business can’t have more than 25 full-time employees, and the average annual wage cannot exceed $50,000. The contributions must be made under an arrangement requiring the employer to make nonelec...(register to read more)