Healthcare Tax Credit

If you are the owner of a small business and provide health insurance to your employees, you may qualify to take advantage of the Health Care Tax Credit.

The small business health care tax credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees. According to the IRS, small employers that pay at least one-half of the premium for employee health insurance coverage may be eligible for the small business health care tax credit. Small tax-exempt organizations also may qualify.

The credit is worth up to 35 percent of a small business's premium costs (25 percent for tax-exempt employers). In 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).

To qualify, an employer must have fewer than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible). A qualifying employer also must pay average annual wages below $50,000.

The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

Contact your Tucceri Associates Tax Professional to find out how you can benefit from this credit.