Here's the Quick Rundown on the Small Business Health Care Tax Credit

Our country thrives on the productivity and success of the traditional small business. Often a hot-button topic in politics, the small business is arguably the cornerstone of our economy.

And to reward the owners of the mighty small businesses, the government offers the Small Business Health Care Tax Credit. This credit aims to help small business owners (and tax-exempt organizations) cover the costs of health care coverage for their workers.

By The Numbers

Eligibility for the credit goes as follows:
• Employers must have LESS than 25 full-time employees (or combo of full & part-time)
• Side note: For credit purposes only, 2 half-time employees equal 1 full-time employee
• Average annual earnings must be under $50,000
• Employer must pay the same % for every employee (at least half (50%) of insurance premium)

The absolute MOST that employers can earn is equivalent to 35% of insurance premiums. For tax-exempt employers and charities, the max is 25%.

One of the benefits of the Small Business Health Care Tax Credit is if you didn't owe any money during the year, the credit is able to be moved to other tax years, past and future!

For charities or other tax-exempt businesses, the credit serves as a refundable amount. Which means, if there's NO taxable income, tax-exempt employers are still able to obtain the credit as a refund.

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