HCR – Small Employers (<50)

You may qualify for employer health care tax credits if you have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less.

To qualify for the Small Business Health Care Tax Credit, you must pay at least 50% of your full-time employees’ premium costs. You don’t need to offer coverage to your part-time employees or to dependents.

The tax credit is worth up to 50% of your contribution toward employees’ premium costs (up to 35% for tax-exempt employers).

The tax credit is highest for companies with fewer than 10 employees who are paid an average of $25,000 or less.

Number of employees: 10 (excluding owners and family)

Wages: $250,000 total or $25,000 per employee

Employee Premium: $450 / EE / Mo.

Employer Premium Contribution: 75% of EE or $337.50 / EE / Mo.

Employer Annual Contribution to Employee Premiums: $40,500

Tax Credit Amount: $20,250 (50% of employer’s contribution)

Net Employer Cost: $20,250 or $168.75 / EE / Mo.