IRS Issues Favorable Small Business Tax Credit Guidance

The Small Business Majority’s John Arensmeyer called  the IRS guidance on the small business tax credit for insurers that offer health insurance “welcome news to hard-pressed small-business owners.” The Affordable Care Act (ACA) makes a tax credit of available to small businesses who offer qualifying health insurance between 2010 and 2016. The maximum credit goes to smaller employers – those with 10 or fewer employees – paying annual average wages of $25,000 or less. The credit is phased out for employers that have 25 or more employees or that pay average wages of $50,000 per year. The IRS guidance allows small business owners who currently receive a state issued small business tax credit to qualify for the federal small business tax credit without deducting the state credit. The IRS also advised that offering dental and vision plans qualifies the small business for the tax credit as well.