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Small Business Health Care Tax Credit

The Small Business Health Care Tax Credit helps businesses afford the cost of health care for their employees. Millions of businesses received postcards from the IRS in April that let them know about the new tax credit. In the case that a business did not receive a postcard form the IRS, it still may be eligible for the tax credit.

Eligibility is determined by three rules:

1.) Providing health care coverage – the employer must cover a minimum of 50 percent of health care for some of its workers. The rate is based on the single rate of health coverage.

2.) Firm size – employers must have less than 25 full time workers or 50 half time workers.

3.) Annual wage – average annual wages must be less than $50,000 per year to qualify

Up to 35 percent of the premium costs for a business are covered by the credit. 25 percent is covered for tax exempt employers, and both taxable and tax exempt organizations may qualify for the credit. There is a gradual reduction of the credit for an organization as the average wages increase along with the number of full time workers.

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Erich J. Ruth

Erich J. Ruth provides technical support for National Software which is the parent company for 1099FIRE. 1099FIRE develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements. 1099FIRE is an employee-owned company located in Phoenix, Arizona.

If you have any questions or comments about our software, feel free to contact us at any time.

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