The small employer health insurance tax credit was included in the Patient Protection clause of the Affordable Care Act under Section 45R. It is designed to help small businesses with modest income employees to help provide adequate health insurances services.
It’s also worth noting that qualifying for this tax credit can sometimes be a complicated process that might require professional consultation. Here at Larson & Company our tax professionals and insurance specialists can help you understand your small business eligibility for the small employer health insurance tax credit, and the necessary measure to remain compliant.
General eligibility requirements include that the employer pays premiums for employee health insurance under a qualifying arrangement. That you also employ fewer than 25 full-time-equivalent employees in the given tax year. At the same time the average annual employee wage must be less than $50,000.
An employer’s eligible premium contribution also needs to be limited to the average cost of health insurance for the region group market in the employer’s state.
Even if your small business qualifies, the tax credit calculation can be relatively complex. Fortunately, Larson’s tax and insurance specialists can help you with this calculation to ensure you are meet all the applicable regulations and can communicate them clearly on your annual tax statements to the Internal Revenue Service.
If you need help determining your small business tax credit eligibility under the Affordable Care Act, you should call 801-313-1900 to set up a consultation with the specialists at Larson & Company.