Tax Credit Calculator

What is the small business health care tax credit?

Small businesses with 25 or fewer employees who currently offer health coverage may already qualify for a federal tax credit. These small businesses must pay at least 50 percent of the health care premiums, and the average annual wages of all employees must be less than $50,000.

The tax credit is worth up to 50 percent (up to 35 percent for tax-exempt employers).

The credit is available to eligible employers for two consecutive taxable years.
Beginning in 2014, the credit is available only if you get coverage through the SHOP Marketplace.

To see if your business might be eligible for a federal tax credit, use the Small Business Majority’s Tax Credit Calculator below. Note: Owners should not be included in the number of employees entered in the tool.

How much am I likely to qualify for?

Calculator property of Small Business Majority and its subsidiary website California Health Coverage Guide

To see if your business might be eligible for a federal tax credit, use the Small Business Majority’s Tax Credit Calculator below. Note: Owners should not be included in the number of employees entered in the tool.

Note: This does not constitute tax advice. Contact your tax professional for information regarding your refund or tax liability.

To learn more or claim the small business tax credit, visit IRS.gov.

How do I claim the tax credit?

If you’re eligible, you’ll claim the tax credit when you submit your federal income tax returns for your business for 2014.

Small businesses and tax-exempt organizations use Form 8941 , Credit for Small Employer Health Insurance Premiums, to calculate the credit.

In addition, federal rules require that you must have an official eligibility determination from VHC. 

Currently, small businesses are enrolling in VHC coverage directly through insurance carriers instead of through the VHC system.  Therefore, you will have to submit a separate application to VHC in order to receive an official eligibility determination. You can use this determination when you file your taxes and claim the credit.  However, it is important to understand that this determination means you qualify to offer coverage to your employees through VHC.  The IRS will determine whether you meet all the other requirements for the small business tax credit, as described above. You can only receive the tax credit if your employees are enrolled in the VHC plan for the applicable tax year. 

Your agent or broker may provide the small employer application and help you fill it out and mail it in. If not, you can submit the application yourself by following these directions:

  1. Download an application  for SHOP eligibility.
     
  2. Print and fill out the application.
     
  3. Mail the completed application to:
    Vermont Health Connect
    103 South Main Street
    Waterbury, VT 05671-8100
     
  4. VHC will notify you by mail about your eligibility to offer VHC small employer coverage.
     
  5. Follow IRS instructions  for claiming the credit when you file your taxes.