It’s possible that small employers that are either new or existing may be able to provide insurance to their employees because of the Small Business Health Care Tax Credit.
For the 2014 tax year, the maximum credit is 50% of premiums paid for small business employers and 35% of premiums paid for tax-exempt small employers, including charities.
To be eligible to qualify for the credit, a small employer must have fewer than 25 employees who work full-time, or a combination of full-time and part-time.
If an employee is enrolled in a qualified health plan that has been offered through a Small Business Health Options Program Marketplace, the tax credit will pay premiums on the employee’s behalf.
A full-time, or equivalent, employee will qualify if he or she earns less than $51,000.
Eligible employers may receive the credit for two consecutive taxable years.
If a small business employer doesn’t owe tax during the year, he or she may carry the credit back or forward to other tax years. Because the amount of the health insurance premium payments is greater the total credit claimed a small employer, who is eligible, may receive the credit as a refund as long as it doesn’t exceed its income tax withholding and Medicare tax liability.
To find out if your small company is eligible for the Health Care Tax Credit, contact you us today.