Reminder: Small Businesses Can Qualify for Health Care Tax Credit
Overview of Eligibility Requirements for Small Employers
The Small Business Health Care Tax Credit is designed to encourage small businesses and small tax-exempt employers to offer health insurance coverage to their employees. The credit can be worth up to 50% of the amount a small business contributes toward employees’ premiums (35% for tax-exempt small employers).
In general, an employer may be eligible for the credit if it:
- Had fewer than 25 full-time equivalent employees;
- Paid an average wage of less than $52,000 a year;
- Paid at least half of its employees’ premium costs; and
- Paid premiums on behalf of employees enrolled in a qualified health plan offered through the Small Business Health Options Program (SHOP) Marketplace (with limited exceptions).
A Small Business Health Care Tax Credit Estimator is available from Healthcare.gov, and an IRS Small Business Health Care Tax Credit information page provides additional details on claiming the credit.
