Recent Nationwide Study Shows Only 43% of Eligible Small Businesses Aware of Health Care Tax Credits

WASHINGTON – Today, Sen. Tom Carper (D-Del.) released the following statement in response to a recent survey by the Small Business Majority that showed only 43 percent of eligible small businesses are familiar with the tax credits enacted as part of health care reform:

“Small business owners want to do the right thing and provide health insurance for themselves and their employees, but rising health insurance costs have made this increasingly difficult, particularly in this challenging economy. That’s why one of my top priorities in crafting the Affordable Care Act was to help create these health insurance tax credits to provide the assistance small businesses needed to offer affordable, quality health insurance. This is an important program for small businesses, but in order for it to be effective we have to make sure that small businesses know this assistance is available. More than 4 million small businesses across the nation – including 11,300 small businesses in Delaware – are eligible to receive a tax credit for providing their employees with health insurance in 2010. Yet, according to a recent study by the Small Business Majority, only 43 percent of eligible small businesses are aware that their business could qualify for this important tax relief enacted as part of the Affordable Care Act. In this difficult economy, it is imperative that we make sure small businesses are benefitting from this critically-needed provision, and can continue to provide their employees with health insurance for years to come.

“The health care tax credit could provide up to $40 billion in savings to our nation’s small businesses over the next 10 years. Small businesses cannot afford to miss out on claiming this important tax credit. I urge tax preparers to take all necessary steps to identify potential savings for small businesses already providing, or wanting to provide, health care benefits to their employees. It is my hope that this financial assistance will make it possible for more small businesses to offer health insurance to their employees and provide them with more resources to expand and create more jobs in the First State. As we prepare for the 2010 tax filing season, I will be working with small businesses, tax professionals and small business organizations in Delaware to ensure that this valuable credit is not overlooked and to further raise awareness of this opportunity to reduce costs for small businesses.”

Sen. Carper held a press conference today in Georgetown with a local tax preparation expert and a local small business to highlight the small business health care tax credit. The purpose of the event was to help remind both accounting professionals and small business owners of the availability of this tax relief for the upcoming tax filing season.

The small business tax credit that was enacted as part of the Affordable Care Act of 2010 is available to businesses with fewer than 25 workers with average wages of less than $50,000 for tax credits as much as 35 percent of the cost of the health insurance that they provide to their employees. The credit will rise to a maximum of 50% in 2014.

The credit is designed to encourage small business employers to offer health insurance coverage for the first time or maintain coverage they already have. More than 4 million small businesses, or 83% of all small businesses in the United States, will be eligible to receive the tax credit in 2010. Over 10 years, the tax credit will be worth $40 billion to our nation’s small employers.

The IRS has provided several tools to help small businesses and their accountants determine if this credit will apply to them. These are available at www.irs.gov. They have also given an example of the benefits that will be received by a typical small business. For example, a restaurant with 40 part-time employees will receive tax relief of $28,000 in 2010 to help pay for the cost of providing health insurance to their employees.

To read the Small Business Majority’s report, please visit http://www.smallbusinessmajority.org/_pdf/tax_credit/Helping_Small_Businesses.pdf.