Prospecting Using the Tax Credit

[Bob_The_Insurance_Guy]

Go to www.thomas.gov and enter HR3590 in the search box and look for summaries.

Starting in 2011 your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or Governmental body of some sort. If you're retired?
So your gross income will go up by the amount of insurance you get. You will be required to pay taxes on a large sum of money that you have never seen.
Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year. For many it also puts you into a new higher bracket so it's even worse.

This is how the government is going to buy insurance for 15 % that do not have insurance and it's only part of the tax increases.

Not believing this I researched the summaries and here's what I'm reading:

On page 25 of 29 :

TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001 , as modified by sec. 10901)
Sec.9002. "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employee's gross income."

People have the right to know the truth because an election is coming in November.

 

[arnguy]

Wow! That is change you can believe in!

 

[moonlightandmargaritas]

Starting in 2011 your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. So your gross income will go up by the amount of insurance you get. You will be required to pay taxes on a large sum of money that you have never seen.the tax increases.

"requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employee's gross income."

No, no, no, no, no. Did I mention no? You need to read a little more carefully - or you are going to be giving people incorrect information.

You are misunderstanding. The amount that is excludable from the employee's gross income has to be REPORTED on Form W-2. It will be in a seperate "box" on the form.

It will NOT increase the amount of your gross income, and will NOT raise your taxable income.

 

[Norwayguy]

It will NOT increase the amount of your gross income, and will NOT raise your taxable income.

Yet! Change you can believe in. Think about it they have already talked about removing the tax break from 401K and other retirement deductions (Which would only decrease retirement savings). This would be a great place to make up additional tax revenue and with this Congress I wouldn't put it past them the only problem is getting Repubs to go along with it...Though McCain pitched a modified version of this during the campaign at least he was going to give a corresponding tax credit.

 

[ABC]

At this point I do not think I can use the Tax credit as a prospecting tool. It seems to be the tax credit is on a sliding scale? So groups that have avg salary of $45,000 is receiving a smaller % tax credit?

So if you have a group that has avg salary of $20,000 it might be worth looking at but we all know on cases like this the employee all qualify for medicaid or some other subsidized plan.

 

[Full Throttle]

So groups that have avg salary of $45,000 is receiving a smaller % tax credit?

Almost nothing. The formula:

(Average FTE Wage - $25,000) / ($25,000) = Ratio

Ratio X 35% Tax Credit = Amount to Reduce the Credit

35% - Amount of Reduction = Actual Tax Credit

In the case above = 7% credit. If they have over 10 employees, it would be reduced even further, if they have 13 employees more in this case, the credit would be 0%!

Mostly hype, not much there except for small, low wage employers. As I stated above, not a target market for employee benefits and the 35% tax credit would be unlikely to sway most of them into implementing a plan.

 

[somarco]

Healthcare Tax Credit Calculator from NFIB

Small Business Tax Credit Calculator

 

[ABC]

Healthcare Tax Credit Calculator from NFIB

Small Business Tax Credit Calculator

Great resource thank you

 

[stuy119]

Might need to start with this in IL:

Many Ill. small businesses can get health care tax credit: study | Crain's Chicago Business

That said, I'm not sure I really want those groups.

 

[emg35]

I keep copies with me of these two links when I go B to B.
http://www.irs.gov/pub/irs-utl/3_simple_steps.pdf
http://www.irs.gov/pub/irs-utl/small_business_health_care_tax_credit_scenarios.pdf
I am planning on hitting B to B next week and using the tax incentive on my fliers. I also plan on letting them know I am not a tax professional and in order to gain a full understanding of tax incentive they should speak to a tax professional.