Small Business Health Care Tax Credit

Woman smiling and using a calculator

Many small businesses are eligible for the Small Business Health Care Tax Credit to assist with the cost of health insurance coverage. To qualify, businesses must:

  • Have an average of fewer than 25 FTE employees (based on a 40 hour work week and excluding owners, owners’ family members, and seasonal employees)
  • Have average annual employee wages below $50,000 (augmented to reflect cost-of-living adjustments (COLA) as of 2014) (business owner salaries are not included in this calculation)
  • Pay a uniform percentage or amount (at least 50%) of the cost of single coverage of each employee’s health insurance

The tax credit is generally available only for coverage purchased through SHOP beginning in 2014, and available for tax-exempt and non-exempt employers. The SHOP Tax Credit Estimator is available at to help agents, brokers, and small businesses determine if they might be eligible for the credit and gauge how much the credit might be worth.

Have questions about your small business eligibility for health care tax credits? Contact your Total Benefit Solutions Affordable Care Act experts at (215)355-2121 or (800)924-6718.