Reporting Cherri Gregg
Filed underAudio, Business & Economy, Consumer News, Delaware Valley, Government, Heard On, KYW Regional Affairs Council, Local, New Jersey, Pennsylvania, Philadelphia, Politics, SHOWS, Special, Syndicated Local, Watch + Listen
Regional Affairs Council -- June 2012
KYW Regional Affairs Council
“The Small Business
By Cherri Gregg
PHILADELPHIA (CBS) — President Obama’s health care reform initiative has been the subject of controversy for months, and there’s still a question on whether it will survive. But in the meantime, the law does gives small businesses a tax advantage.
Most people dread tax time, but some small businesses have welcomed it since the Affordable Care Act began providing tax credits for smaller companies in 2010.
“Small businesses overwhelming support the tax credits. The problem is, they don’t know about them,” says John Arensmeyer (right), CEO of Small Business Majority.
His group has launched a campaign to educate businesses about the health care tax incentives.
“The credit is available to anybody with fewer than 25 fulltime employees, average annual wages of less than $50,000, and for employers that pay more than 50 percent of the premium costs,” he explains.
Charles Muracco (right), a business coach and CPA with Muracco & Liuzzi PC in Sewell, NJ, represents small businesses in the Greater Philadelphia area. He says that although the maximum tax credit is 35 percent — and will increase to 50 percent in 2014 — few businesses will be able to qualify.
“Many clients have average wages of greater than $25,000 due to the higher cost of living in this area,” he notes. “A lot of people in the past had raised salaries and decreased the amount that they were paying in health care costs. It’s really hard to go back to an employee and say, ‘We’ll lower your salary but we’ll give you the health insurance.’ ”
He says he coaches new businesses to consider the credit when structuring employee pay.
“The best employer would be someone who has 15 or less employees making an average salary of $25,000 or less. Most professional firms are not going to qualify. Where we’ve seen most companies qualify is in non-skilled labor or in the manufacturing industry.”
Ken Weinstein (right) is a partner at Philly Office Retail, a company that employs about six full-time employees. He pays 100 percent of the health care costs for some workers and receives a 19-percent tax credit.
“We were able to pay for two more employees than we were able to previously,” he tells KYW Newsradio. “So now we pay for health care for five employees instead of three.”
For more information on the tax credits or to determine whether your company qualifies, go to the IRS web site.
In addition, the National Federation of Independent Business has an online “tax credit calculator” at nfib.com. The Small Business Majority has a similar tax credit calculator at smallbusinessmajority.org.
The City of Philadelphia also offers a list of tax credits for small businesses at business.phila.gov.
Listen to the Part 4 podcast…
Regional Affairs Council — June 2012