Small Business Health Care Tax Credit

Have you heard of the Small Business Health Care Tax Credit? Although it has been around for a few years now, the amount of the credit is increasing for 2014! The credit will help ease the costs for the individual mandate of the Affordable Care Act. The purpose of the credit is to help you offer health insurance to your employees. From 2010-2013 the maximum tax credit was 35% of employer’s premium payments made on behalf of employees but for 2014, that maximum credit will increase to 50%.

Who is eligible? Employers must have fewer than 25 full-time employees who make an average of $50,000 per year or less. For a full tax credit, your company must have 10 or less full-time employees making $25,000 a year or less. Owners are typically excluded in these calculations. Employers must also pay at least 50% of the premium costs for those full-time employees. Health plans must be offered through a Small Business Health Options Program (SHOP Exchange) to qualify for the credit.

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