How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ed Johnson Your Own Question
Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Type Your Tax Question Here...
Ed Johnson is online now
A new question is answered every 9 seconds

How will Obamas proposed Small Business Health Tax Credit

Resolved Question:

How will Obama's proposed Small Business Health Tax Credit for small businesses work?
Submitted: 7 years ago.
Category: Tax
Expert:  Ed Johnson replied 7 years ago.



A resounding YES, is my opinion. Consider the main reason.


90% of all small businesses in America have net earnings of less than 250,000 dollars. (data provided by women's venture fund, NYC).


Last night in a debate Senator Biden also echoed that figure, or one close to it. (he may have said 95%, but the two figures are within the margin of error for such data quotes).


It costs about 8 to 15 dollars per hour, and sometimes as high as 35 dollars an hour to provide full health care and retirement benefits to employees. The larger employers (the 5 to 10 percent who earn 1 million or more a year) can leverage total number of employees to reduce the health care costs. But that other 90 to 95% of small businesses really can not not afford to provide health care at the rising costs of such coverage.


This means employees have to also pay a higher percentage. In many cases, employees have to pay it all, with the only benefit is a reduced group coverage cost over individual health plan costs. (health insurance premiums can range from 250 to 850 dollars per month, cobra is around 500 to 650 per month).


By providing a tax incentive, equal to 50% of the cost of premiums, suddenly health care coverage becomes affordable as an employee benefit paid for in whole or in part by the employer.


So it will work to help provide health care coverage to employees. It will also have a secondary effect of making employee costs less expensive and a few business will be able to use the spill over savings to hire more employees and increase productivity.


YOu can read more about the final Obama Biden small business plan at:



Customer: replied 7 years ago.
I didn't ask 'if" it would work, I asked "how" it will work. I've read the campaign literature and it only says "a refundable credit of up to 50 percent on premiums paid by small businesses on behalf of their employees." For instance, is it on a sliding scale that increases as the number of employees covered increase or as the total business paid premiums increase. If I pay $80,000/year in health care premiums for my employess, can I expect to get a $40,000 tax credit under Obama's plan? Or, will it be something less than that?
Expert:  Ed Johnson replied 7 years ago.



I apologize for not clarifying my response. I understood. But NO ONE, not even Obama can tell you how that will look.


The reason is, that:


1. He is not yet president, and the final form it will take, will actually be determined by Congress. He has to present the bill to Congres, if and when he will be elected President, and then it has to be approved, and then codified by the department of treasurey, and then the IRS will produce implementing rules and regulations.


I can say, that the IRS has a tentative scenario. From my work on the tax committee (see my profile), I happen to know the IRS produces such templates so they can be ready to make changes and implement as quickly as possible. BUT, these templates and scenarios are not public knowledge, and are not even known by me or my committee.


However, obamas' plan as currently presented has no cap, and no sliding scale. it is a flat 50% tax credit based on total employee premiums paid by the employer.


So for example: if you paid 125,000 in employee premiums, you can expect a 62,500 tax credit.


The reason for such a cap would be to make sure ALL employees get health care. To cap it or require a sliding scale would eliminate some, or make it unfair to some who would pay more than others.


In your scenario, yes, you could expect a 40,000 tax credit under what is proposed right now.


But as you know this could really be something less based on your total tax bill. Not to exceed, gross or net revenues for example.


We do not know at this point, if it will even have any carryover provisions.


What is proposed now, may in fact be very different than what is passed and approved by he congress when and if he gets into office.





Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Ed Johnson and 3 other Tax Specialists are ready to help you

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

Meet The Experts:

  • Wallstreet Esq.

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
< Last | Next >
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
  • Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • Richard's Avatar


    Tax Attorney

    Satisfied Customers:

    29 years of experience as a tax, real estate, and business attorney.
  • Robin D.'s Avatar

    Robin D.

    Senior Tax Advisor 4

    Satisfied Customers:

    15years with H & R Block. Divisional leader, Instructor
  • Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
  • jgordosea's Avatar


    Enrolled Agent

    Satisfied Customers:

    I've prepared all types of taxes since 1987.
  • R. Klein, EA's Avatar

    R. Klein, EA

    Enrolled Agent

    Satisfied Customers:

    Over 20 Years experience