Campaign alerts small businesses and nonprofits to federal tax credit program

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By Barbara Pash

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By Mike Licht, Notions Capital

For the first time, small businesses and nonprofit organizations can get financial help for the health care coverage they offer their workers. But so new is the program, part of the Obama health care reform, that campaigns to alert businesses are taking place around the country, including in Maryland.

“We want every small business in the state to take advantage” of the small business tax credit, Vinnie DeMarco, executive director of the nonprofit Maryland Health Care for All, said of the program.

“We’ve been running radio and print ads, holding events and workshops, and working with consultants to small businesses,” DeMarco said of a state-wide campaign that will continue in 2012. The next event is scheduled for Nov. 10 at 8 a.m. at the Greater Baltimore Urban League, 512 Orchard Street, Baltimore.

Based on a national survey, Small Business Majority, a Washington, D.C.-based national small business advocacy group, estimates that Maryland has a total of 82,600 small businesses and nonprofits. Of that number, about 66,000 are eligible for the small business tax credit

“Because this is a brand-new tax credit and because this is the first time that small businesses are getting help to offset heath insurance, a lot of small business-owners are just learning about it,” said Jessica Stone, outreach manager of the Small Business Majority.

“They are focused on running their businesses and they’re not up on tax law,” said Stone, whose group is itself conducting awareness campaigns in 11 states.

The first year the small business tax credit could be claimed was 2010. September 15, 2011 was the deadline for filing an extension for 2010 taxes. Until the federal tax information is released, usually a year after the tax year, Stone does not have a figure for how many small businesses and nonprofits took advantage of the tax credit.

To qualify for the small business tax credit, the small business must have fewer than 25 full-time employees; pay average annual wages below $50,000 per employee; and contribute at least 50% of each employee’s premium.

Qualified small businesses are eligible for tax credits up to 35% of employees’ insurance premiums; tax-exempt nonprofits, up to 25%. Tax credits are determined on a sliding scale. (A calculator to determine the credit is on Small Business Majority’s Web site.)

“As long as it’s an employer-sponsored plan, the tax credit applies to any licensed insurance carrier in the state,” said Stone, noting that in 2014, tax credits are set to increase to up to 50% for small businesses and up to 35% for nonprofits.

Carolyn Quattrocki, executive director of the Governor’s Office of Health Care Reform, has been collaborating with the Health Care for All campaign and working on her own to get the word out about the tax credit.

“We don’t want to leave any federal dollars on the table. The [tax credit] program is only as good as people accessing it,” said Quattrocki. She has requested that state agencies inform the small business community about the program.

Quattrocki said the tax credit program ”is the only financial benefit that is aimed directly at small businesses,” although there are other aspects of health care reform that will benefit them indirectly, such as pilot projects that could reduce the cost of health care.

“The program is part of a larger issue. We are ramping up to get the word out about the benefits of health care reform more generally and in a more effective way,” she said.

DeMarco, of Health Care for All, credits CareFirst, which contributed $100,000, and AARP of Maryland, which gave about $20,000, for the awareness campaign. He said over 100 small business-owners have told him they are taking advantage of the tax credit program because of it.

“Our outreach is making a difference,” said DeMarco.

About The Author

Len Lazarick

Len Lazarick was the founding editor and publisher of and is currently the president of its nonprofit corporation and chairman of its board He was formerly the State House bureau chief of the daily Baltimore Examiner from its start in April 2006 to its demise in February 2009. He was a copy editor on the national desk of the Washington Post for eight years before that, and has spent decades covering Maryland politics and government.

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