Small Businesses Had Been Charged Much More that Larger Companies

The $36,500 fine is not commensurate with the penalty charged to larger companies. In fact, it is 18 times more than charged to bigger employers that don’t offer insurance. Many small businesses found compliance to this rule to be “outrageous” and welcome the elimination of the penalty.

Juanita Duggan, CEO and President of the National Federation of Independent Business, stated, “Both the Senate and the House have now passed critical legislation to protect small business owners from outrageous IRS fines…a significant percentage of NFIB members reimbursed employees for the cost of health insurance, a practice the IRS tried to stamp out... Now Congress has acted to make it clear that businesses should not be punished just for trying to help their employees pay for health care costs.”

Changes Offer New Options for Small Businesses

If you are a small business (less that 25 full time workers making less than $50K average annual wages) then the elimination of this penalty offers you new options. If you have ceased offering benefits to reimburse employees for health care costs because of the penalty, you now may have the leeway to offer reimbursements again. If your business has never offered reimbursements to employees before, this might be an opportunity to explore the option.

In addition, small businesses are offered several tax breaks and tax credits through the existing Affordable Care Act. To fully explore their impact on your business and your record keeping, it’s best to consult with a knowledgeable tax professional.

Need to Know More About How to Handle Taxes with the ACA?

Need help estimating your expected tax liability with healthcare related issues and devising ways to reduce your tax bill in 2017 and beyond? PDM’s tax experts can help advise you on the best course of action. Contact us; with our years of technical experience, advanced training, and cutting edge technology, we are your financial partner.