Small Business Tax Credit

In 2014, a small employer could qualify to receive a Small Business Health Care Tax Credit of up to 50 percent of the employer’s premium costs (up to 35 percent for non-profits) to offset the cost of insurance. However, an agency or instrumentality of a tribal government is not eligible for the tax credit unless it is an organization described in section 501(c) that is exempt from tax under section 501(a) such as a 501(c)(3) organization or non-profit organization.

A small employer must meet all of these requirements to be eligible for the tax credit:

  1. Fewer than 25 full-time equivalent employees (FTEs);
  2. Pays an average annual wage of less than $50,000 per year per FTE;
  3. Pays for at least 50% of the cost of health insurance coverage for each of its employees; and
  4. Has received a notice of SHOP eligibility in a federally facilitated SHOP.

In 2014, an employer may only receive the tax credit if the employer purchases insurance through the SHOP. Click here to connect with the SHOP in your state.

Click here [insert link to employer survey] to fill out an easy employer survey to determine your responsibility and find out if you are a large or small employer.