
Newly released IRS Regulations show the actual value of the ObamaCare Small Business Tax Credit does not measure up to the hype.
Throughout the run-up to passage of ObamaCare in Congress, and in the re-selling campaign since passage, the President has continuously touted its “small business tax credit.” Here’s a typical Obama quote from a re-selling pep rally in April:
Starting now, small business owners that provide health care to their workers can sit down at the end of the week, look at their expenses, and begin calculating how much money they’re going to save!
For small business owners who don’t currently provide health insurance, they’ll be able to factor in this new benefit in deciding whether to do so. And with that savings, employers may be able to cover an additional worker or hire that extra employee they’ve needed.
Even the IRS was used to help promote ObamaCare, sending post cards out to millions of small businesses to tell them they may be eligible for a tax credit equal to 35% of their health insurance costs.
The sales presentation makes it looks quite generous to employers. But, as with all the promises of ObamaCare, the written details contradict the marketing. It turns out that the small business tax credit is so limited, so restricted it’s worthless or nearly worthless to most small businesses.
- The tax credit does not apply to the cost of health insurance for Business owners or partners. It doesn’t apply to relatives of owners or partners who are employees in the business.
- Businesses with 25 or more full time employees are ineligible for the tax credit.
- Businesses whose employees are paid, on average, more than $50,000 per year are ineligible.
- If the employer provides a plan that costs more than the government says is the “average” cost of health insurance in the employer’s state, the tax credit is reduced.
But even these stern rules make the tax credit appear to be more generous than it is. Read more »