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Tax credit aims to save businesses thousands

Frederick News Post
Originally published June 23, 2011

By Meg Tully News-Post Staff

Learn more about the small-business health care tax credits and use a tax credit calculator at www.smallbusinesstaxcredits.org. For more information over the phone, call the Maryland Citizen’s Health Initiative at 410-235-9000 or text HEALTH to 877877.

A new federal tax credit could save small businesses in Frederick County thousands of dollars to provide employee health insurance.The Frederick County Health Department and the Frederick County Commissioners launched a new initiative, “Get Connected,” on Wednesday to promote the credit.

They were joined by representatives of the Maryland Citizens’ Health Initiative, AARP, the governor’s Office of Health Care Reform and a nonprofit small-business organization, Small Business Majority.

All of the organizations are working together to promote the credit.

“We don’t want to leave any of this federal money on the table,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative. “We want it here in Maryland.”

Businesses qualify for the credit if they cover at least half of employees’ health insurance premiums, employ 25 or fewer full-time equivalent employees and have employees who are paid an average of $50,000 a year or less.

The credit is 35 percent of the cost of the employer portion of the health insurance premium if the business is for-profit, or 25 percent for nonprofits. Starting in the 2014 tax year, the credit rises to 50 percent and 35 percent, respectively.

The credit was available starting in the 2010 tax year. For those who have already filed their 2010 taxes, they may file an amendment to get the credit. It will be available at the current rate until 2014, when it goes up.

Maryland Sen. Ron Young, a Frederick Democrat, said that health care is a major concern for small businesses as they look to hire new employees.

“Everything we can do to show they can hire and the economy is turning and there are opportunities, we ought to do that,” Young said.

More than 66,000 businesses in Maryland are eligible for the credit, DeMarco said, and most of them don’t know about it.
AARP bought a newspaper ad in Frederick to bring more attention to the issue.

“These tax breaks are to make sure that we have a healthy workforce and a healthy economy, and we hope that that will be the next step of where we’re going,” said Hank Greenberg, advocacy director for AARP.

According to the Small Business Majority advocacy organization, only 49 percent of firms with fewer than 50 employees in Maryland offer health insurance to employees. Ninety-six percent of firms with more than 50 employees, by contrast, offer health insurance to employees.

“This is essentially free money in the pockets of small-business owners to help them create jobs in their local communities and to improve their businesses and continue to improve on building their dream about starting and running their own business,” said Jessica Stone, outreach manager for Small Business Majority.

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