The credit is part of the Patient Protection and Affordable Care Act. The act encourages small businesses to offer health insurance coverage.
The maximum credit is equal to 50% of health care premiums paid by eligible small businesses and 35% for tax-exempt organizations.
To be eligible for the credit, small business employers must meet all of the following criteria:
- Have fewer than 25 FTEs for the tax year;
- Pay less than $50,000 per FTE in average annual wages;
- Pay the premiums under a “qualifying arrangement,” in which the employer pays premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the coverage.
For more information, contact:
Taxpayer Assistance Center
New York, NY 10007
Phone: (212) 4361000