Q. What tax credits for small businesses were included in the Patient Protection and Affordable Care Act?

The tax credit is worth up to 35% of the premium your business pays to cover your workers. In 2014, the value of the credit will increase to 50%. Your business qualifies for the credit if you cover at least 50% of the cost of health care coverage for your workers, pay average annual wages below $50,000 and have less than the equivalent of 25 full time workers.

The size of your credit depends on your average wages and the number of employees you have. The full credit is available to firms with average wages below $25,000 and less than 10 full time equivalent workers. It phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent between 10 and 25 full time workers.

The credit is not payable in advance to the taxpayer nor is it refundable. The credit is only available to offset actual tax liability and is claimed on the employer’s tax return

We will keep you informed as the regulations are being written. In the meantime, if you have any questions, please do not hesitate to give us a call.