2024 Pay or Play Affordability Percentage

Tax Credit for Small Businesses Providing Health Insurance

The Affordable Care Act established a tax credit to encourage small business owners to offer their employees health insurance.

This summary is designed to give a brief overview of the credit and how it is calculated for 2014 and beyond.  Creative Benefits can help our small business clients determine if they may be eligible for the credit. Which small businesses are eligible?

  • 25 or fewer full-time equivalent employees (importantly, FTEs are different from full-time employees), and
  • FTEs earning an average annual salary of less than $50,000 each, and
  • A group health insurance plan for which the business pays at least 50 percent of the premiums on a uniform basis for employees

Read more: Client Alert–Small Business Tax Credit