September 23, 2009
Baucus Agrees to Tax Credit for Small Charities in Health-Care Bill
Sen. Max Baucus, chairman of the Senate Finance Committee, has agreed to amend his health-care bill to provide a tax credit to help small charities provide health insurance to their employees.
His original language, unveiled last week, would have allowed the credit only for small businesses that pay income taxes, excluding most nonprofit organizations. Several senators proposed amending the text to make nonprofit groups eligible for the credit.
Senator Baucus, Democrat of Montana, offered new language on Tuesday that would allow eligible charities to get a tax credit for some payroll taxes. These include the payments they make to cover income taxes and Medicare taxes withheld from employee paychecks and the Medicare taxes they pay as employers.
The credit would be available to employers with no more than 25 full-time-equivalent employees with annual wages averaging no more than $40,000. The bill sets out a complicated formula for determining the amount of the credit, using factors like the percentage of the insurance premiums paid by the employer and the average cost of premiums for small businesses in the employer’s state.
The finance committee is debating Mr. Baucus’s bill this week.
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