Franchot: Health insurance tax credits are available now for small businesses
Baltimore Business Journal
July 18, 2013
By Sarah Gantz
Small businesses don’t have to wait until 2014 to get a health insurance tax credit and Maryland Comptroller Peter Franchot wants everyone to know it.
Franchot will be sending letters to 5,000 small businesses in Howard County that currently qualify for the tax credit in an effort to spread the word. Franchot is working with health advocacy group Maryland Health Care for All Coalition to raise awareness about the tax credit. The credit is available to certain small businesses to help offset the cost of health insurance.
“This is an example of how the Affordable Care Act is helping Maryland businesses right now,” said Health Care for All President Vincent DeMarco. “We are doing everything we can to make sure small businesses know about it.”
If the mailing campaign is successful in Howard County the group plans to expand the effort to other areas in the state. The group estimates about 66,000 businesses in Maryland qualify for a tax credit.
Beginning in 2014, businesses will be able to access the tax credit by purchasing health insurance through Maryland Health Benefit Exchange’s virtual insurance marketplace, called Maryland Health Connection.
But what many business owners don’t realize, DeMarco said, is the credit is available now. The tax credit is currently worth up to 35 percent of a business’ health premium costs. That goes up to 50 percent in 2014. The amount of money individual businesses qualify for varies depending on how many full-time equivalent employees work there and the average salary. Businesses with fewer than 10 employees and an average salary of less than $25,000 will get the biggest tax credit.
Here are the requirements to qualify for a tax credit:
- Fewer than 25 employees
- Average salary for full-time equivalent employees is less than $50,000
- Employer pays at least of employees’ premium costs
Businesses can claim the credit for 2012 in their annual tax return. Businesses can also retroactively claim the credit by filling out an amended tax return.
The Maryland Health Care for All Coalition has set up a website where businesses can find out whether they qualify for a tax credit and how much they can get.