Does My Business Qualify For A Health Insurance Tax Credit?
If you’re a small business owner, you may be wondering if you qualify for a health insurance tax credit. The good news is that many small businesses are eligible for this credit, which can help offset the cost of providing health insurance to your employees.
To qualify for the small business health care tax credit, your business must meet the following criteria:
- You must have fewer than 25 full-time equivalent employees (FTEs).
- Your average annual wages of your employees must be less than $56,000 (adjusted for inflation beginning in 2014).
- You must pay at least 50% of your full-time employees’ premium costs.
- You must offer a qualified health plan to your employees through a Small Business Health Options Program (SHOP) Marketplace.
If your business meets all of these criteria, you may be eligible for a tax credit of up to 50% of the costs you pay for your employees’ premiums (35% for non-profit employers). The amount of the credit depends on the size of your business and the average wages of your employees.
To claim the small business health care tax credit, you must use Form 8941, Credit for Small Employer Health Insurance Premiums. You can find more information on how to complete this form on the IRS website.
Here are some additional things to keep in mind about the small business health care tax credit:
- You can only claim the credit for two consecutive taxable years.
- You can claim the credit even if you don’t have a profit for the year.
- You can claim the credit even if you offer health insurance to your employees through a private exchange, but you must meet certain criteria.
If you’re not sure whether your business qualifies for the small business health care tax credit, you can use the IRS’s Small Business Health Care Tax Credit Estimator. This tool will help you determine your eligibility and estimate the amount of the credit you may receive.
Here are some tips for small businesses that want to take advantage of the small business health care tax credit:
- Shop around for different health insurance plans to find the best deal for your business and your employees.
- Consider offering a variety of health plan options to meet the needs of your employees.
- Make sure you understand all of the requirements for claiming the tax credit.
- Keep good records of all of your health insurance expenses.
If you have any questions about the small business health care tax credit, you can contact the IRS or a tax professional.
