Your Business Could Get A 35 Percent
Tax Credit Through Health Care Reform

We're here to help you understand health care reform and even how it could save you money. Let’s start with a 35 percent tax credit for small businesses. If you employ fewer than 25 workers or the equivalent in part-time staff, pay at least half of their health insurance premiums (can include dental and vision coverage) and pay out less than $50,000 in average wages, you may qualify.1

Does Your Business Qualify? Answer The Following:

  • Yes
  • No

*The total number of employees and part-time equivalents does not include business owners or family members. To qualify, businesses must pay at least half of insurance premiums for all employees at the single coverage rate, employ fewer than 25 full-time or part-time equivalent employees and pay less than $50,000 in annual average wages.

Frequently Asked Questions

  • What is the Small Business Tax Credit?

    • Under the Patient Protection and Affordable Care Act in the current health care reform legislation, small businesses may qualify for the tax credit if they employ fewer than 25 employees, pay at least half of the company’s insurance premiums (health insurance and add on coverage such as dental and vision) in 2010 and the company’s average wage is less than $50,000.1
  • How much is the tax credit?

    • Qualifying businesses can get up to 35 percent of the cost of premiums in tax credits for the 2010 tax year. The rate increases to 50 percent for qualifying businesses on Jan. 1, 2014.
  • How do I get the tax credit?

    • Those who qualify can claim the credit on the employer’s annual income tax return.
  • Can other organizations qualify for the tax credit?

    • Tax exempt organizations can also qualify for the tax credit. Those organizations can earn up to a 25 percent credit for the same guidelines as the small business. That rate increases to 35 percent on Jan. 1, 2014.
  • How would the tax credit look in real dollar amounts?

    • The Internal Revenue Service provided the following fictional business as an example:

      Main Street Mechanic, an automobile repair shop with 10 employees, can get $24,500 in tax credits for 2010.

      Here’s how:

      Employee:
      10
      Annual Employee health care costs:
      $70,000
      Wages:
      $250,000 total, or about $25,000 per employee
      Tax Credit for 2010:
      $24,500
      Tax Credit for 2014:
      $35,000
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