Small Business Health Care Tax Credit

The IRS has recently encouraged small employers who provide health insurance to their employees to use the Small Business Health Care Tax Credit.  The credit was included in the Affordable Healthcare Act of 2010.  The credit has been available since 2010 and will continue to 2016.  Its purpose is to encourage small businesses and tax-exempt organizations to provide healthcare insurance to their employees.

For tax years 2010 through 2013 the credit can be up to 35 percent of the eligible premiums paid by small businesses and 25 percent of eligible premiums paid by tax-exempt organizations.  In 2014 the maximum credit increases to 50 percent for small businesses and 35 percent for tax-exempt organizations.

Healthcare premiums qualify for the credit as the small business employer pays up to half of the employee health care premiums under a qualified healthcare arrangement.  A qualified healthcare arrangement is defined as coverage that meets the minimal essential coverage under the ACA.  Most healthcare coverage provided today qualifies as minimal essential coverage.

Even if you’ve already filed a return in prior years where you provided healthcare to your employees and did not claim the credit, you can amend and get the credit for those prior years’ tax returns.

If you are a small business or tax-exempt organization and plan to provide healthcare coverage to your employees or have provided coverage in the past and not claimed the healthcare credit and need help to maximize your healthcare credit options, schedule your free consultation by calling (480) 888-7111 [or submit a web request here].