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
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.