Small Business Tax Credit

A Small Business Tax Credit under The Affordable Care Act is available to small businesses that offer group health insurance.

As the end of 2011 draws closer, small business owners should be evaluating their tax liabilities for this year and looking for ways to reduce their taxes. One of the “perks” of Health Care Reform was to provide employers that offer group health plans to their employees a way to qualify for a tax credit.

In order to be eligible for the small business health care tax credit an employer must:

Pay at least half the cost of single coverage for their employees.
Have no more than 25 full-time equivalent (FTE) employees, not counting owners or their family members.
Average annual wages of employees must be less than $50,000 per FTE.