NASE Blogs

Report Finds Health Tax Credit Underused

Jun 07, 2012

Posted by Kristin Oberlander - The Government Accountability Office (GAO) announced last week that the Affordable Care Act's tax credit for small businesses was dolefully underused. In fact, only about 17 percent of the businesses that would otherwise be eligible for the maximum tax credit offered health insurance to employees. In addition, 83 percent of claims were for partial credits rather than the full 35 percent available. Republicans seized on the opportunity to paint the health care law, again, as out-of-touch with business and consumer needs.

The NASE has been at the forefront in the small business health care debate and have been vocal about this credit since its inception. While we appreciate that lawmakers set aside a credit for the small-business community through 2014, this credit does not help the self-employed. Simply, you will not be apply to receive the credit if you are defined as a one-person business, if your spouse, a child, other family members or relatives work in your business, if you have more than 25 full-time employees, or if your average annual wages per employee is more than $50,000. Read more about how to calculate your eligibility in this Self Made blog entry on the topic.

The NASE will continue to push legislators to implement laws that will help those businesses that make up the majority of the small-business community - micro-businesses and the self-employed. Small changes in the tax code, such as allowing business owners to deduct the cost of health insurance as a business expense, would be a start. Read more about the association's views on health care here and here.