The ACA encourages employers to give their employees the opportunity to benefit from the lower costs that group health insurance plans offer.

In addition to the many ACA exemptions, certain small group employers may also be eligible for Tax Credits to offset health care costs.

If you meet the following criteria, you may be eligible for a Small Business Health Care Tax Credit to help cover the cost of facilitating group coverage. To qualify your organization must meet the following criteria:

  • Have fewer than 25 full-time equivalent employees
  • Pay an average wage of less than $50,000 a year
  • Pay at least half of employee health insurance premiums
  • Purchase coverage through the small business health options program, also known as the SHOP marketplace.

It’s definitely worth investigating if you are a small business owner – the tax credits can add up to some real dollars: Up to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. That’s both a credit and a deduction for employee premium payments. To find out more and view a tax credit estimator, visit the IRS Small Business Resource page.

How to claim the Small Business Tax Credit?

The process is very straightforward and outlined in the IRS instructions.  Form 8941 is designed to help you calculate the credit you are entitled to, and this amount is to be included in the general business credit on your income tax return.

If you are a small business employer, you may be able to carry the credit back or forward. And if you are a tax-exempt employer, you may be eligible for a refundable credit.

What next?

Running a small business today is more challenging than ever, but you don’t need to go it alone. At TrueCoverage, we understand your challenges and have built solutions to keep your business competitive and compliant with health care regulations; helping you to attract and retain the skill force you need to grow your business

You can easily compare and enroll in SHOP plans or get a free quote on-line using the TrueCoverage portal. Or, you can seek the guidance of our licensed insurance agents to navigate through the process or address any questions you might have about choosing the right plan.

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