04 08 2016

ACA tax credit helps small businesses

04 08 2016

Small businesses failing to take advantage of ACA tax credit

From working capital loans to tax incentives, small business owners must do all they can to ensure they have steady cash flow and the resources to help the company grow. There are a variety of alternative lending options to provide small business loans for an organization, and there are several tax credits available, such as Section 179 of the IRS code that lets companies deduct the cost of capital expenses.

However, not enough small businesses are taking advantage of a tax credit to boost their cash flow, and that’s the Small Employer Health Care Insurance Tax Credit. According to the report “Small Employer Health Tax Credit: Limited use Continues Due to Multiple Reasons” authored by the U.S. Government Accountability Office, not nearly enough employers that are eligible for the credit are utilizing it. In 2014, out of an estimated range of 1.4 million to 4 million, only approximately 181,000 small businesses received the credit. Even the 2014 total represented a slight dip from the total in 2010, when 188,303 employers took advantage of the credit.
Despite a $2 billion estimate from the Congressional Budget Office and the Joint Committee on Taxation, the total claims number only amounted to $468 million.

How it works
Small businesses are eligible for the credit if they pay an average of less than $50,000 a year to fewer than 25 full-time equivalent employees, and cover at least half of these individuals’ health insurance premiums. If a company meets these requirements, it can obtain 50 percent of premiums paid by the employer. This credit is available to eligible employers for two consecutive taxable years.

By not taking advantage of this major opportunity for savings, many small employers are essentially turning away free money. However, while some owners might merely be opposed to the incentive and providing health care for their employees, there are also not enough companies that are aware of the benefits associated with the program. Further, many of the provisions of the tax program might not be enticing enough for some owners.

What went wrong?
In addition, since it can only be claimed for two consecutive years, some owners are eschewing the credit, since they feel this can potentially skewer their budgeting projections and accounting. Further, many small business owners claimed the filling out paperwork for the credit was too complicated and complex.

As noted by Accounting Today, the Obama administration and Congress have announced several changes to the credit, including altering the phase-out rules, extending the period when the credit can be claimed to more than two years and expanding the size of eligible employers

Find Out How Much Funding You Qualify For

Fields marked with an * are required
By clicking this button I agree to all terms and conditions.

Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan.  What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number.  We will also ask for your name, address, date of birth, and other information that will allow us to identify you.  We may also ask to see your driver’s license or other identifying documents.

 

For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.

 

For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121.  Funding amount and credit approval is subject to a full credit profile review.