While the Republican led House continues to debate everything but creating jobs, Democrats are looking out for Iowa’s small business owners. The Senate passed SF506 that helps Iowa small businesses get additional help for providing adequate health care coverage for their employees. Read the Des Moines Register article below:
Iowa small businesses could get cash back for health care coverage, bill says
4:35 PM, Mar 21, 2011 | by Jennifer Jacobs | Des Moines Register
Iowa-based small businesses could get a tax credit from the state to help defray the cost of providing health care insurance, under a bill the Iowa Senate approved today.
“Even the smallest businesses, the ones that don’t have big profits or a large tax liability, can get a state refund check by providing health care to their employees,” said Sen. Tom Rielly, D-Oskaloosa.
The Senate approved Senate File 506 with a 48-0 vote.
The proposal would build on the federal tax credit available through the federal health care reform law, the Patient Protection and Affordable Care Act.
The federal tax credit is available now for businesses with 25 or fewer employees. Until 2013, the tax credit is 35 percent; it jumps to 50 percent in 2014.
The state’s proposal would benefit about 60,000 Iowa businesses with 10 or fewer employees, Rielly said.
The refundable state tax credit would be equal to 25 percent of the credit an employer earns under the federal tax credit, the bill says.
A company that spends $50,000 a year to provide health care benefits will get a $17,500 federal tax credit. The state credit would save the business another $4,375 for a total of $21,875, Rielly said.
The Iowa credit would be available for the 2011 tax year, applying retroactively to Jan. 1, 2011, the bill says.
The loss in state revenue would be $6.8 million in budget year 2012, and $8 million the following year, according to the nonpartisan Legislative Services Agency.
Democratic senators said this bill is part of their multi-part plan to create jobs in Iowa.
Small businesses pay 18 percent more on average than large businesses for the same coverage, Rielly said. Premiums have gone up three times faster than wages in the last 10 years, he said.