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WASHINGTON, D.C. -- President Obama's proposed budget, presented earlier this week, includes the expansion of the small business healthcare tax credit, bringing good news to small business owners across the country.
The proposed expansion would mean every small business that has fewer than 50 full-time equivalents (FTEs), average wages under $50,000 a year and pays at least half of the health insurance premium costs for their employees would qualify for some credit. In addition, some would qualify for a bigger credit than before, according to the Main Street Alliance network.
"This is a big deal for a small business like mine," said David Borris, owner of Hel's Kitchen Catering in Northbrook, Ill., on the north shore of Chicago, and a member of the Main Street Alliance network's national steering committee. His business employs about 25 full-time employees and additional part-time workers to bring his FTE count to about 33.
"Under the old version of the credit, we were above the threshold to qualify," Borris said. "Under this new proposal, we'd be right in the sweet spot. We just did a quick run on the numbers and it looks like we'd qualify for something like a 13-percent credit. That's over $8,000. That's money I can use to expand our health coverage, either getting more employees covered or improving our benefits. It's a win-win for us."
Another member of the Main Street Alliance -- Jim Houser, owner of Hawthorne Auto Clinic in Portland, Ore. -- said he already qualified for the tax credit, but will be happy if it is expanded so other small businesses can qualify.
"I'm excited to see that many more small businesses would be able to benefit in a big way from this credit under the new proposal. This is just the kind of thing the small business community needs right now," he said. "We've got to keep moving forward on making health insurance more affordable for small businesses, and building on this tax credit is a great step forward."
The Main Street Alliance is a national network of state-based small business coalitions. The alliance creates opportunities for small business owners to speak for themselves on issues that impact their businesses and local economies.