October 18, 2016

Understanding the Small Business Healthcare Tax Credit

Small Business Healthcare Tax Credit The Small Business Healthcare Tax Credit helps small businesses and tax-exempt organizations afford the health care they provide their employees. Your business is eligible for the credit if: Your business employees fewer than 25 employees. That includes those working full-time and part-time. If the average annual wage paid to employees must be less than $50,000 (in 2015), and the employer must pay at least 50% of all employees’ health insurance premium costs. Beginning in the tax year 2014, the tax credit became worth a maximum of 50% of premiums paid by small business employers and 35% of premiums paid by small tax-exempt employers. If you didn’t owe any taxes during the tax year, the credit could be carried back or forward to other tax years. To learn more about small business tax issues, please contact a qualified tax professional. Tip courtesy of IRS.gov