For Businesses In Alabama To Reduce Cost
Insurance Premium Reduction)
businesses in Alabama can take advantage of the Small
Business Health Insurance Premium Deduction Enhancement Act
to reduce the cost of doing business. Act 2008-559 came
into effect early this year. It allows small businesses and
their employees to take an additional 50% deduction on their
company provided health insurance premiums.
the new law small businesses with less than 25 employees
that provide a health insurance plan to their employees can
take a 50% deduction in their contributions to the
premiums. Employees of these small businesses can also
claim the 50% deduction on their contributions. This 50%
deduction is in addition to what is currently allowed.
also claim the 50% deduction if they have a Health Savings
full-time employees are considered when determining the
number of employees for this deduction. Part-time employees
are not considered as qualifying employees. Small
businesses with part-time and full-time employees will only
count the number of full-time employees when determining the
total number of employees.
However, for both the employer
and employee to claim this deduction they can do so only for
employees that earn no more than $50,000 of wages and report
no more than $75,000 ($150,000 if married filing a joint
return) of adjusted gross income on the Alabama individual
income tax return for the applicable tax year. These
individuals are labeled as “qualifying employees”. Those
who earn above the specified amounts are labeled
“non-qualifying employees”. Both qualifying and
non-qualifying employees are counted in determining the
number to be considered for the total number of employees.
The spouse and children of a
sole proprietor are not counted in the number of employees
for qualification purposes.
Small Business Health Insurance Premium Deduction
Enhancement Act (Act