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).
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.
Note: Effect of Sequestration on Small Business Health Care Tax Credit
Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic cuts took place as of March 1, 2013. These required cuts include a reduction to the refundable portion of the Small Business Health Care Tax Credit for certain small tax-exempt employers under Internal Revenue Code section 45R. As a result, the refundable portion of your claim will be reduced by 8.7 percent. The sequestration reduction rate will be applied until the end of the fiscal year (Sept. 30, 2013) or intervening Congressional action, at which time the sequestration rate is subject to change.