WASHINGTON (AP) - Pitching President Barack Obama's health care
law to skeptical business owners, the IRS on Monday will announce
ground rules for small firms wishing to claim a new federal tax
credit for health insurance.
Created under the health overhaul law, the tax credit covers up
to 35 percent of the premiums that certain small businesses pay on
behalf of their workers. The IRS notice addresses unanswered
questions about the benefit, which is available starting this year.
The agency's action comes days after the nation's largest small
business lobbying group announced it was joining a lawsuit
challenging the health care law. The National Federation of
Independent Business argues that Congress overstepped its
constitutional authority by imposing a requirement that most
Americans obtain health insurance either through an employer, a
government program or buying it directly.
The IRS notice clarifies that employers can apply the credit
toward dental and vision benefits, not just medical coverage. A
fact sheet released by the Treasury Department also says that
employers can claim the federal benefit even if they receive state
tax credits for their insurance premiums.
The White House estimates up to 4 million small businesses may
qualify for the tax credit, but it's not clear how many will be
eligible. To begin with, they have to provide health insurance -
and many small employers don't. To qualify, companies must pay at
least 50 percent of their workers' premiums.
Eligibility is also limited by company size and wages. A firm
has to have fewer than 25 full-time workers averaging less than
$50,000 a year in pay.