A rather good news for small businesses! The Obama Administration has officially enacted a tax credit to help offset the cost of medical benefits for small businesses all over the country. This is all a part of the recent health care reform, and it is hoped that it will encourage more of these small companies to offer insurance to their employees, a move that will soon be mandatory under threat of expensive penalties of $2,000 per uncovered employee per year.

So, what are these tax credits, exactly? Basically, you will be given a federal credit of up to 35% of all costs for providing coverage. This is meant for companies of 25 or less employees, of which the average salary for those employees is less than $50,000 per year. This will cover a large number of businesses in the United States.

The amount paid in the credit will phase out depending on the exact number of employees versus average gross annual salary. That means the full 35% will be applied only to companies of fewer than 10 employees making less than $25,000 per year. But the sliding scale still offers significant cuts for those that apply under the maximum. Read more…