Millions of small businesses failed to claim tax credits they could have received under President Obama’s healthcare law, according to a new report from the advocacy group Families USA.
The report says more than 3 million businesses were eligible for the new healthcare credit in the 2011 tax year. The White House, however, has estimated that only 360,000 businesses received the credit.
Families USA said the White House estimate was probably low, but that many employers aren’t aware of the tax credit and therefore aren’t taking advantage of a policy that could make their healthcare plans more affordable.
All told, small businesses were eligible for more than $15 billion in tax credits during the 2011 tax year, according to the report from Families USA and Small Business Majority, a liberal-leaning small-business group.
Businesses have to meet several criteria to qualify for the new tax credits. They must employ fewer than 25 people, pay an average salary of less than $50,000, provide healthcare benefits and cover at least half of their employees’ premiums.
Even with those conditions, roughly 3.2 million small businesses are eligible for a tax credit, Families USA said. About 1.3 million are eligible for the maximum tax credit. The credits cover up to 35 percent of companies’ health costs.
Families USA and Small Business Majority hired the Lewin Group for their analysis of the tax credit.
They said nearly 20 million Americans work for a business that was eligible for the credit in the 2011 tax year, and 5.8 million work for a company eligible for the maximum credit.
The National Federation of Independent Business, the leading trade group for small businesses, has said the credit is inadequate and won’t make much of a dent in the rising cost of healthcare.