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Tax Credit for Small Employers

The Affordable Care Act (ACA) created a tax credit for certain small employers that provide health insurance coverage to their employees. In order to be eligible for the health care tax credit, an employer must:

  • Have fewer than 25 full-time equivalent employees (FTEs);
  • Pay average annual wages of less than $50,000 per FTE; and
  • Pay at least half of employee health insurance premiums (based on single coverage).

To take advantage of the credit, small employers must buy coverage through an Exchange’s small business health insurance marketplace (SHOP). The credit can be claimed for any two consecutive taxable years beginning in 2014 (or beginning in a later year) through the SHOP.

More Information

For more information on the health care tax credit, including detailed rules for eligibility and calculating and claiming the credit, please contact your The Wladis Companies, Inc. representative.

Download a detailed article on the tax credit for small employers