SBA Administrator Explains Important Health Care Tax Credit Info for Small Businesses

Administrator Karen Mills [pictured], of the U.S. Small Business Administration [SBA], has just written an open letter to small-business owners across the United States, explaining the immediate benefits available to small businesses as part of the Affordable Care Act.

Following, is the full text of her letter:

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Dear Small-Business Owner,

For decades, access to affordable health insurance has been the No. 1 concern of small-business owners. To help you address that concern and provide quality, affordable coverage for your employees, the new Affordable Care Act gives you a number of new tools and benefits.

The most immediate benefit you should know about is the tax credit to help you pay for up to 35 percent of your employee premiums starting this tax year. An estimated 4 million small businesses may qualify for these tax credits, totaling about $40 billion over the next 10 years. Go here to learn more about the tax credit, including new information that explains how this federal credit is in addition to state-level credits you might receive, and how dental and vision coverage are also eligible for the federal credit.

The Affordable Care Act also included reporting requirements if you pay another business $600 or more, starting with 2013 filings. Small-business groups have voiced concerns about the possible burden this places on people like you. That’s why the IRS is already planning to exempt from this requirement your transactions that use credit and debit cards.

Also, the IRS, SBA and others in the Administration are looking for additional ways to minimize burdens and avoid duplicative reporting. We welcome your comments and input as we move forward together to address implementation issues under the new law.

Over the last 16 months, this Administration has taken steps to provide tax relief that puts more money in the hands of small-business owners like you -- including write-offs for new equipment, credits for hiring unemployed workers, and capital-gains exclusions for small-business investors. We know that sensible tax relief like this will help you grow your business, create new jobs, and continue drive America’s economic recovery.

With warm regards,

Karen Mills

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For detailed information about the new Small Business Health Care Tax Credit, visit IRS.gov: http://bit.ly/SmallBizTaxCredit.

SOURCES: Internal Revenue Service, U.S. Small Business Administration, The White House
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Healthcare Overhaul Could Save Money and Boost Jobs, Researchers Say

Health insurance reform will do more than provide coverage to millions, make health insurance more affordable, and slow long-term growth. It will also create jobs. According to two new studies, reform will slow cost increases for businesses, and free up money for raises and new jobs.

Following is an excerpt from a story by Duke Helfand, published in today's "Los Angeles Times":

“National healthcare legislation in Congress could slow the growth of medical costs, allowing employers to create 250,000 to 400,000 new jobs a year over the next decade, economists from Harvard University and USC are predicting.

"Wading into the hotly debated issue of whether the legislation is a job creator or a job killer, researchers from the two universities say that the reforms under consideration would slow the rate of cost increases and free up money for companies to raise wages and hire more workers.

"Specifically, healthcare savings could be achieved through proposals for greater competition in insurance markets, better coordination of care and shrinking administrative expenses, they said in a report to be released today. With those changes, employers could then reallocate money now spent on ever-growing premiums to other business priorities.”

To read the full story, go to: http://bit.ly/HealthcareOverhaul

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* President Obama's Plan for Health Insurance Reform: http://www.whitehouse.gov/issues/health-care

* President Obama’s Weekly Address, "Health Insurance Reform, Small Business and Your Questions" [07/24/2009]: http://bit.ly/WeeklyHealthReformSmallBiz

* Health Insurance Reform Reality Check: http://bit.ly/HealthReformRealityCheck

* How Health Insurance Reform Will Help Small Business: http://bit.ly/SmallBizHealthReform

* Video: "Health Reform Will Benefit Small Business -- Not Burden It": http://bit.ly/RealityCheckSmallBizVideo

* Report: "The Economic Case for Health Care Reform": http://bit.ly/EconomicCase

* Report: "Helping the Bottom Line: Health Reform and Small Business": http://bit.ly/HelpingTheBottomLine

* Report: "Insurance at Risk: Small Business Employees Risk Losing Coverage": http://bit.ly/InsuranceAtRisk

* Report: "Lower Premiums, Stronger Businesses: How Health Insurance Reform Will Bring Down Costs for Small Businesses": http://bit.ly/StrongerBusinesses

* Report: "The Economic Effects of Health Care Reform on Small Businesses and Their Employees": http://bit.ly/EconomicEffects

SOURCES: Council of Economic Advisers, HealthReform.gov, Los Angeles Times, WhiteHouse.gov
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