In regards to the Patient Protection and Affordable Care
Act, small employers (those who have less than 50 full-time equivalent employees
(FTE)) are not required to offer their employees health coverage. However, an
employer with 25 or fewer full-time equivalent employees may be eligible for
incentives from the federal government to provide their employees with health
coverage.
Many small employers do not realize they have the
opportunity to claim a federal income tax credit on their annual tax returns.
Unfortunately, a very low percentage of qualified business owners are taking
advantage of this credit. Here are the IRS guidelines to be eligible.
- The expenses that an employer can count towards the tax
credit includes the premiums that are paid for each employee. The employer must
contribute at least 50% of the cost of the health care coverage for employees. - Must have less than 25 FTE workers when totaling all
individuals’ hours of employment. - Employers must pay their workers an average of less
than $50,000 per year to qualify. The smaller and lower wage employers will
receive a larger tax credit.
If your business meets these requirements, we encourage you
to contact a Health Care Reform Agent (such as our Health Department here at Sweeney & Sweeney) to verify your options and help you
calculate your eligibility of a tax credit.