HCR – Small Employers (<50)

Beginning in 2014, the small business health insurance tax credit is available only if you get coverage through the SHOP Marketplace.

Will I qualify for small business health care tax credit?
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).

Higher benefits for smaller businesses
The tax credit is highest for companies with fewer than 10 employees who are paid an average of $25,000 or less.
Example of how the tax credit works:
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.

Have questions about the SHOP Marketplace for businesses with 50 or fewer employees? Call 214-443-1400 or email George Knox

Additional Information:

What You Need to Know About The Small Business Health Care Tax Credit?
What Qualifies as Eligible Health Insurance Coverage for the Tax Credit?
Which Of My Employees Should Be Included in the Calculation?
Do you qualify for a small business health care tax credit?
Small Business Tax Credit Estimator