Small Business Health Care Tax Credit

This page covers the following topics:

• Overview 
• 
  
• Employer Eligibility 
• 
  
• Calculating the Credit 
• 
  
• Determining FTEs and Average Annual Wages 
• 
  
• How to Claim the Credit 
• 
  
• Additional Resources 
• 
  

Overview

Certain small businesses and tax-exempt employers that pay at least half of the premiums for 

employee health insurance coverage may be eligible for the small businesses health care tax 

credit. For tax years 2010–2013, the maximum credit is 35% for small business employers and 

25% for small tax-exempt employers. For tax years beginning in 2014 or later, the maximum 

credit increased to 50% of premiums paid for small businesses and 35% of premiums paid for 

small tax-exempt employers.

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