Business Health Care Tax Credit

If you are an eligible employer (defined below), you may be eligible for a 35% tax credit for health insurance premiums paid on behalf of your employees.

 

An eligible employer is an employer who:

 

>>> Covers at least 50% of the cost of health care coverage for some of its workers based on the single rate

 

>>> Has less than the equivalent of 10 full-time workers; partial credit is given for employers with between 10 and 25 full-time equivalent workers

 

>>> The average annual wage for each full-time equivalent worker is below $25,000; partial credit is given for employers with between $25,000 and $50,000 average annual wage per full-time equivalent worker

 

Employers with more than 25 full-time equivalent workers, or with an average annual wage of more than $50,000 are not eligible for the credit

 

In determining the number full-time equivalent workers, or the average annual wage, business owners and related family members are not counted

 

Amount of the credit:

 

>>> 35% of premium costs in 2010 through 2013 (see phase out rules below)

 

>>> Starting on January 1, 2014, the credit increases to 50% of the premium costs.

 

The credit phases out gradually form employers with average annual wages between $25,000 and $50,000 and for employers with the equivalent of between 10 and 25 full-time workers.