To encourage businesses to offer health benefits to their employees, the federal government is offering tax credits to small businesses. These credits are available to an estimated 4 million small businesses, including nonprofits. Taxable employers are eligible for a maximum credit of 35% of healthcare costs. Tax-exempt employers are eligible for a maximum credit of 25%.
To qualify, small employers must:
- Have fewer than the equivalent of 25 full-time workers
- Pay average annual wages below $50,000
- Cover at least 50% of the cost of health care coverage for their workers
When it’s effective
The Small Business Tax Credit is available beginning with the 2010 tax year.
H&R Block offers individual and small business tax calculators to your employees. These powerful, easy-to-use calculators can help your employees learn more about the tax changes under the PPACA.
The individual consumer future insurance tax credit
The Health Insurance Tax Credit Eligibility Estimator, powered by H&R Block, can help your employees learn more about how the PPACA and the launch of health insurance exchanges in 2014 may affect them. The PPACA requires U.S. citizens and legal residents to buy health insurance or pay a penalty beginning in 2014, with few exceptions.
This new, easy-to-use online tool estimates a consumer’s eligibility for tax credits toward the purchase of individual health insurance on an exchange and the maximum amount an individual may pay in premium contributions based on family size and household income*.
The estimator is intended for both members and nonmembers, ages 19 to 64 years, who may purchase coverage on their own from a health insurance exchange and who are not covered through other programs such as employer-sponsored insurance, Medicare or Medicaid.
Check out the Small Business Tax Credit Calculator and individual subsidy Healthcare Tax Credit Calculator or call us today to learn more. Find out what the new tax credit could mean for your coverage. Call us at 855-667-4621.
* Estimate is based on the individual’s current household income and a 1 percent annual inflation adjustment.