Not All Small Businesses Will Get Tax Benefits Promised In Health Law
Tax credits to help small business pay for employee health coverage fall short of the "broad eligibility" White House officials promoted, The Associated Press reports. The credit was said to apply to firms "with fewer than 25 workers and average annual wages under $50,000 that provide health coverage," like Zach Hoffman's office supply company where 24 employees earn an average of $35,000. But Hoffman found his company won't get any help. Why? "Lost in the fine print: The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages." A complicated formula means some firms that meet the key requirements for the credits will get nothing (Alonso-Zaldivar, 5/19).
The Associated Press, in a separate story, details another way the health overhaul will affect small business owners: They'll have to keep far more detailed records of their purchases. "This new law requires small businesses to issue 1099 forms to people or companies that sell them more than $600 worth of goods or services. It takes the 1099 beyond its most common business use, which is to report money paid to independent contractors or freelancers." That might encourage business owners to buy software to help them keep their books straight (Rosenberg, 5/19).