ABOUT THE SMALL BUSINESS HEALTH CARE TAX CREDIT
The Affordable Care Act includes a federal tax credit to help small businesses and charities pay for health insurance. The credit can be applied retroactively starting in tax year 2010, but many organizations still aren't aware of it.
WHO'S ELIGIBLE?
In general, small businesses and nonprofits that:
• Cover at least 50 percent of health care premiums
• Have fewer than 25 full-time equivalent employees (part-time workers count proportionately)
• Pay workers less than $50,000 on average
HOW MUCH IS THE TAX CREDIT?
• The maximum credit is 35 percent of the premium contributions for small businesses and 25 percent for charities.
• The amount is calculated on a sliding scale based on average wages and number of employees.
• The smallest firms (10 or fewer workers) and lowest wage scales (less than $25,000) get full credit.
• In 2014, when health care exchanges go online, tax credits increase to 50 percent for small businesses and 35 percent for charities.
To find out more: www.irs.gov/sbhtc
Source: Internal Revenue Service
