The Payroll Blog
News, tips, and advice for small business owners
As a small employer, your company may be eligible for the Small Business Health Care Tax Credit. With this tax credit, saving money is a real possibility. Here is an example shared by the IRS:
"If you pay $50,000 a year toward employees' health care premiums — and if you qualify for a 15 percent credit, you save $7,500."
As the Affordable Care Act appears to be here to stay, it's a good idea to investigate how you might benefit.
With the ability to save so much money, all small employers should be interested in the Small Business Health Care Tax Credit. But here is the question: does your company qualify?
Eligibility requirements include:
The IRS made some big changes to the Small Business Health Care Tax Credit in 2014. Most notably, the maximum credit increased to 35 percent of premiums paid for small tax-exempt employers and 50 percent for traditional small business employers.
Note: eligible employers can take advantage of the credit for two consecutive years.
If you are just now learning about the Small Business Health Care Tax Credit, you are not out of luck. Take a look at your 2014 tax return. If you neglected to claim the credit, you still have time to file an amended return. You can use Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate how much you qualify for.
Many small businesses struggle to provide employees with high quality, comprehensive health insurance coverage. This tax credit benefits both employers and employees. The company itself saves money, while employees gain access to a policy they can trust.