Small Business Health Care Tax Credit
Is Your Business
The small business health care tax credit was
included in the Affordable Care Act enacted last year and is designed to
encourage small businesses to offer health insurance coverage to their
employees for the first time or maintain coverage they already provide.
Small businesses that pay at least 50 percent of the premiums for employee
health insurance coverage under a qualifying arrangement may be eligible
for this tax credit.
The credit is specifically targeted to help small
businesses and tax-exempt organizations that primarily employ 25 or fewer
fulltime equivalent employees with average incomes of $50,000 or less.
Salaries paid to members of an owner's immediate
family do not count against the limits, nor do salaries paid to S
corporation shareholders owning greater than 2% of the company's stock or
any individual who owns more than 5% of any other type of business
For 2010 through 2013, the credit may offset up to 35
percent of premiums paid by eligible small business employers and 25
percent of premiums paid by eligible employers that are tax-exempt