3 simple steps
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The 3-step document outlines how small employers can determine if they qualify for the Small Business Health Care Tax Credit by calculating their total number of employees, average annual wages per employee, and percentage of insurance premiums paid for employees; if the business has fewer than 25 employees, average wages are under $50,000, and over half of single-coverage premiums are paid, then the business may qualify for the tax credit.
3 simple steps
- 1. 3 SIMPLE STEPS If you are a small employer (business or tax-exempt) that provides health insurance coverage to your employees, determine if you may qualify for the Small Business Health Care Tax Credit by following these three simple steps: 1 2 Determine the total number of your Calculate the average annual wages employees (not counting owners or of employees (not counting owners family members): or family members): Full-time employees: Take the total annual wages paid to (enter the number of employees who work employees: at least 40 hours per week) ÷ + Divide it by the number of employees Full-time equivalent of part-time from STEP 1: employees: (total wages ÷ number of employees) (Calculate the number of full-time equivalents by dividing the total annual = average wages hours of part-time employees by 2080.) = total employees If the total number of employees is fewer than 25 GO TO STEP 2 If the result is less than $50,000, AND 3 You pay at least half of the insurance premiums for your employees at the single (employee-only) coverage rate, then you may be able to claim the Small Business Health Care Tax Credit. Find out more information at IRS.gov