Finance & Enjoyment Blog

Affordable Care Act Tax: Small Business Tax Changes

Affordable Care Act Tax: Small Business Tax Changes in Colorado

The tax landscape is going to change for all Americans beginning in 2014. Starting January 1, 2014, individuals, families and businesses will be affected by the new Affordable Care Act. As a new set of rules takes place, KKB is here to answer any questions you may have regarding changes to your Colorado small business taxes. Below is a summary of the outlined tax changes that may affect your small business tax status. Read the full document from the government outlining those changes full document from the government outlining those changes to the tax landscape.

Changes in taxes for small businesses depend on a variety of factors, such as the number of employees the company has. The information provided below will have the biggest impact on small business.

Tax credits to certain small employers that provide insurance – To be eligible for credits, a business must offer health insurance to its employees as part of their compensation and contribute as least half the total premium cost. The business must have no more than 25 full-time equivalent employees and the employees must have annual full-time equivalent wages that average no more than $50,000. However, the full credit is available to only an employer with 10 or fewer full-time employees and whose employees have average annual full-time equivalent wages from the employer of less than $25,000.

Years the credit is available – Starting in 2014, the credit is only available to an eligible small employer that purchases health insurance coverage for its employees through a state exchange and is only available for two years. The amount of the credit is generally 50% of the employer’s nonelective contributions toward the employees’ health insurance premiums. The credit phases out as firm-size and average wage increases.

Special rules:
The employer is entitled to an ordinary and necessary business expense deduction equal to the amount of the employer contribution minus the dollar amount of the credit.

Self-employed individuals are not treated as employees for the purposes of this credit.

For businesses with at least 50 employees, the possible penalties vary depending on whether or not the employer offers heal insurance to its employees

We suggest that you read the entire document on these tax changes at And please contact us, your Colorado CPAs for all your small business tax services.

How to use this Information:
Our Colorado CPAs at KKB will help you navigate the small business changes of the new health care reform. You have a whole life to plan; let us do the financial planning and tax advising. We’ll take care of all the particulars of the new health care reform.

Inviting Feedback, Comments and Interactions:
Tell us your feedback on the new health care changes for small businesses.

Posted in Rules and Regulations »

0 Responses to "Affordable Care Act Tax: Small Business Tax Changes"

Leave a Reply

Fields marked with  * are required.

Name *
Email Address *
(will not be published)