Interested in a tax credit for up to 50% of the cost of your small business health insurance premiums?
If you have fewer than 25 full time equivalent (FTE) employees and pay at least 50% of your employee’s health insurance premiums, this credit may be for you.
And tax credits are dollar for dollar offsets against your tax bill, so don’t miss out if you are eligible.
Health Care Tax Credit Eligibility
Here are the basics. As an employer you must:
• Have fewer than 25 FTEs
• Pay average wages less than $50,000 per year
• Pick up the cost of at least 50% of the health care premiums for your employees
• Buy your health insurance through the Small Business Health Options Marketplace (SHOP)
The tax credit is available for two consecutive tax years & can be carried back or forward to other tax years.
And Nonprofits can reap a benefit too. Tax exempt organizations with up to 35 employees can actually get a refund of the tax credit amount since they don’t have an offsetting tax obligation.
What is SHOP?
The SHOP network is part of the Affordable Care Act’s online health care marketplace. It allows small businesses to purchase employee health care plans directly online or through SHOP registered insurance brokers and agents.
SHOP is available to employers with 50 or fewer FTEs. (An FTE counts as one full time employee or 2 half-time employees).
Visit the SHOP website for more information, but don’t leave a tax credit on the table if you are eligible.