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New Tax Credits for Small Businesses Offering Health Plans from SHOP

Tax Tip Tuesday Financial Blog Post

Small Business owners providing health care to their employees should take time to look into the Small Business Health Care Tax Credit, on the IRS website. There are guidelines for those wishing to claim the credit, as well as those that were unable to do so in 2017  because of unavailability of coverage in the Small Business Health Options Program (SHOP) Marketplace. Notice 2018-27 offers directions for calculating the credit under those circumstances.

In order to qualify for the credit, small business owners should generally provide employees a qualified health plan from a SHOP Marketplace. Also, small employers may only claim the credit for two consecutive tax years.

The recently provided relief helps employers who first claim the credit for all or part of 2016 or a later tax year for coverage offered through a SHOP Marketplace. However, if they were unable to offer SHOP Marketplace coverage to employees for all or part of the remainder of the credit period due to SHOP Marketplace plans being unavailable where the employer is located, there are still options for receiving the credit.

The employer to may be able to claim the credit for health insurance coverage provided outside of a SHOP Marketplace for the remainder of the credit period if that coverage would have qualified under the rules that applied before January 1, 2014.

The notice does not affect previous transition relief for the credit that was separately provided for 2014, 2015 and 2016.


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