How Much is Your Small Business Health Care Tax Credit Worth?
by Meredith K. Olafson, Community Moderator
- Created: April 23, 2014, 2:24 pm
- Updated: April 23, 2014, 2:24 pm
Editor’s Note: This blog is from Healthcare.gov and was published on April 23, 2014.
When you buy health coverage for your employees through the Small Business Health Options Program (SHOP) Marketplace, you may qualify for a tax credit worth up to 50% of your premium contributions.
Our new SHOP Tax Credit Estimator can tell you what that credit might be worth to your business.
Here are some key things you should know about the tax credit and applying for SHOP:
- Employers with fewer than 25 full-time equivalent employees may be eligible for the Small Business Health Care Tax Credit, worth up to 50% of employer premiums contributions, if their employees make an average of $50,000 a year or less.
- The tax credit will be available to eligible employers for two consecutive taxable years.
- The tax credit may be available to eligible tax-exempt employers who could receive up to 35% of employer premium contributions, and can access the credit as a refund.
- Generally, the Small Business Health Care Tax Credit is available for eligible employers purchasing SHOP health plans.
- To enroll in a SHOP plan in most states, you’ll use an agent, broker, or insurance company. You’ll also need to complete a SHOP eligibility application.
- Visit IRS.gov for the most up to date information and guidance on claiming this tax credit.
- Even if you’re a small employer who does not qualify for a small business tax credit, you may still purchase coverage through SHOP.
Apply for SHOP coverage any time, all year
SHOP is open to employers with 50 or fewer full-time-equivalent employees (FTEs) and enrollment is open year- round.
A new SHOP Full-Time Equivalent Calculator can help you find out if your business meets the definition of a small business for SHOP based on the number of employees. If your state runs its own SHOP, visit your state Marketplace for information on how to calculate FTEs.
Choose your state and we’ll help you get started. If you have questions about the SHOP Marketplace call 1-800-706-7893 (TTY: 1-800-706-7915), Monday through Friday, 9 a.m. to 7 p.m. ET. Agents and brokers may also use this number.
About the Author
Meredith K. Olafson is Senior Policy Advisor for the U.S. Small Business Administration where she oversees the agency's education and outreach efforts around health care and the Affordable Care Act.
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About This Blog
This blog is provided for informational purposes only and is not intended as legal or tax advice. Readers should consult their legal or tax professionals to discuss how these matters relate to their individual business circumstances.
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