Obama touts tax credit for small businesses

Millions of small businesses will benefit from a tax credit for health insurance premiums under the new health care law, President Barack Obama told crowd in Maine on Thursday. 

In politically friendly territory, Obama ticked off the benefits of the recently passed plan saying, "this health care tax credit is pro-jobs, it's pro-business and its starts this year."

The Congressional Budget Office has estimated the bill could save upwards of $1.3 trillion over 20 years but has said the second 10 years are more difficult to gauge. The law is expected to reduce deficits by $143 billion over the next 10 years, according to the CBO.

Overall costs will go down "over time for families, businesses and the federal government, reducing our deficit by $1 trillion over the next two decades." 

Obama said plans are in the works to notify small business about the tax credit that begins immediately to cover up to 35 percent of health insurance premiums for workers. The credit will increase to 50 percent in 2014. Businesses can claim the credit for up to six years. Firms can claim the credit from 2010 to 2013 and any two years after that time.

To qualify, a company needs to have few than the equivalent of 25 full time workers, according to the White House. It also must pay average annual wages less than $50,000 and cover at least half of its workers. 

CBO has estimated the tax credit will save small businesses $40 billion by 2019. 

The Council of Economic Advisors has estimated that 4 million businesses will qualify for the tax credit if they provide insurance coverage.