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Tax Credit for Small Businesses

  • What is the small business health care tax credit?
    You may qualify for employer health care tax credits if you have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less. To qualify for the Small Business Health Care Tax Credit, you must pay at least 50% of your full-time employees' premium costs. You don’t need to offer coverage to your part-time employees or to dependents.    Starting in 2014, the tax credit is worth up to 50% of your contribution toward employees' premium costs (up to 35% for tax-exempt employers). For additional information about the Small Business Health Care Tax Credit you can also visit the IRS website for calculators, forms and instructions. 
  • What’s considered a small business?
    If you have 50 or fewer full-time equivalent (FTE) employees you're considered a small business under the health care law. As a small business, you may get employee insurance through the SHOP Marketplace. This applies to non-profit organizations too. If you have fewer than 25 employees, you may qualify for the Small Business Tax Credit. Non-profit organizations can get a smaller tax credit. 
  • Do I have to offer health coverage to my employees?
    No employer has to offer coverage. Some large businesses that don't offer coverage meeting certain standards may have to make a shared responsibility payment in 2015. If you have fewer than 50 full-time equivalent (FTE) employees, you are not subject to the Employer Shared Responsibility parts of the law. You may use SHOP to offer coverage for your employees. As of January 1, 2015: If you have 50 or more FTEs you may have to make an Employer Shared Responsibility Payment if at least 1 of your full-time employees gets lower costs on their monthly premiums when buying insurance in the Marketplace. Learn more about the Employer Shared Responsibility Payment . Do I have to offer health coverage to my employees?