Small Business in U.S are Unaware of the Benefits of Health Care Tax Credit

A recent survey by Wall Street Journal and Vistage International, a peer advisory organization for CEOs and senior level executives based in Sandiego says, small business owners and CEOs find it hard to understand the Health Law as presented by Federal government. The survey is for those with annual revenues of $1 million to $ 20 million. It throws light on business and public policy issues.

When asked if they are qualified for a small-business health care tax credit 2010, two-third said they were not certain because they were not aware of the details.

The credit is aimed to help the small tax-exempt organizations take the benefit of cost of covering their employees. Reportedly, only 170,000 small businesses took advantage of the credit in 2010 as against millions expected.

It is, however, feared that the Supreme Court ruling could nullify the credit. If the ruling is in its favor, it would trigger a debate whether or not the credit be expanded so as to enable it to cover a great chunk of small U.S. companies. The health-care tax credit came into being when the Affordable Care Act was converted into law in 2010.

The salient findings of the survey are as follows:

  • 10% of the participants in the survey said their businesses qualified for the award and 24% said their firms did not.
  • Some business cited reasons such as too narrow restrictions, complex tax forms, low dollar returns as reasons for not using the credit whilst others believe it is because of lack of awareness of the program.
  • A new index, Small Business CEO Confidence Index has been invented. It is based on some monthly finds and will track changes in business attitude among small-business owners and chief executives. To start with, it has been fixed at 100 and will move up or down depending on the future survey findings.
  • Half of the participants in the survey have plans to hire in the year ahead. About 58% percent of the companies in the West foresee expansion of their staff, as against 44% in Northeast. One-third of the heads of small companies had job openings in June, which remain unfilled.
  • 67% of the companies predict increasing sales and only 8% expect a decrease. However, outlook is not very positive about economic conditions in the US overall.
  • Business owners in Southeast states expect 40% better conditions compared to 24 % in the Northeast. One-third expect that overall business conditions would improve, 46% expect them to stay the same and 18 % expect them to worsen.

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