National Report Highlights Small Business Tax Credits

Posted May 09, 2012, at 3:27 p.m.

71% of Maine Small Businesses are Eligible to Receive Credits

(Augusta) Consumers for Affordable Health Care (CAHC), the largest health care consumer advocacy organization in Maine, today co-released a new report written by Families USA and the Small Business Majority that states over 19,500 Maine small businesses are eligible to receive a small business tax credit established by the Affordable Care Act (ACA) in 2010. That number represents 71% of all the small businesses in the state (19,710 out of a possible 27,760). Moreover, in 2011 Maine small businesses received $900 in credits per employee, which equals one of the highest credits per worker in the United States. The national average is $800, according to the report.

“Thanks to the Affordable Care Act, Maine small businesses – the lifeblood of our economy – can receive significant tax credits for offering health insurance coverage to their workers,” said CAHC’s public relations coordinator Greg White. “While health care premiums continue to rise, the small business tax credit helps to alleviate those increases and offers much needed relief to small business owners. If paired with other Maine programs that can help with cost, like DirigoChoice or the Part-Time Worker Voucher Program, offering coverage can be even more affordable for businesses.”

For a small business to qualify for the small business tax credit they must:

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• cover at least 50% of the cost of single (not

family) health care coverage for each employee;

• have fewer than 25 full-time equivalent employees

(FTEs);

• have employee average wages of less than $50,000 a

year.

The amount of the credit is allocated on a sliding scale. Since passage of the ACA in 2010, small business owners have been eligible to receive a maximum credit of 35% or 25% for charities. Beginning in 2014 the maximum credits increase to 50% for small businesses and 35% for charities.

“We know from our opinion polling that small businesses want to offer their employees coverage but many of them can’t afford it. The tax credits will make it easier for small businesses to offer coverage, which makes their businesses more competitive and boosts their ability to create jobs and drive economic growth,” said John Arensmeyer, CEO of Small Business Majority.

“Small businesses seeking to provide health coverage for their employees have traditionally faced health insurance premiums that are significantly higher than those for large businesses,” said Ron Pollack, executive director of Families USA. These high premiums are due to higher administrative costs and premiums per employee in the small group insurance market, he said.

Other Maine specific numbers include:

• 39% of Maine small businesses (7,690) are eligible

to receive the full 35% tax credit;

• the 27,760 small businesses in Maine employ

134,100 people;

• of the small businesses in Maine eligible for a

tax credit, those businesses are eligible to

receive over $79 million in tax credits.

For the full report, “Good Business Sense: The Affordable Care Act’s Small Business Health Care Tax Credit,” please click here.

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