Lawmakers: Push tax credit for small business

U.S. Sen. Charles Schumer and Congressman Bill Owens are moving to help small businesses.

Schumer (D-N.Y.) is pushing tax preparers to inform small-business owners about a new tax credit that many do not know exists.
The credit is part of the Affordable Health Care Act, and more than 300,000 small businesses in New York are eligible for it.

The credit is expected to save small businesses about $40 billion nationwide over the next decade and is worth up to $25,000 or more per business per year.

About 82 percent of all small businesses qualify for the credit, Schumer said. Businesses with fewer than 25 employees and average wages of less than $50,000 can receive up to 35 percent on the health insurance they provide to workers.

The credit will increase to 50 percent in 2014.

But a recent report by the Small Business Majority showed that only 43 percent of businesses are aware of the credit.

Schumer is urging H&R Block, Jackson Hewitt and tax preparers across the state to ensure that small-business clients are taking advantage of the credit during the upcoming tax season.

“At a time when our economy is still turning around, small businesses need all the help they can get,” Schumer said.  “The bad news is that far too many small businesses don’t know that this credit exists, but the good news is that it’s not too late to put that cash in the pockets of the businesses so essential to the economy of New York.”

Owens (D-Plattsburgh) has introduced H.R. 417, the Small Business Tax Relief Act of 2011, a bill that would repeal a provision of the new health-care law that requires businesses to send Internal Revenue Service 1099 forms for every business-to-business transaction of $600 or more for both property and services.

“Small businesses are already overburdened with tax paperwork and reporting requirements,” Owens said. “There is near universal agreement that this expanded 1099 reporting requirement will only further increase the cost and complexity of complying with the tax code for small businesses.”

Owens said repealing the provision before it takes effect in 2012 is critical to protecting small businesses as the nation continues to recover from the economic downturn.