How much is your Small Business Health Care Tax Credit worth?

Published on October 10, 2014

When you buy health coverage for your employees through the Small Business Health Options Program (SHOP) Marketplace, you may qualify for a tax credit worth up to 50% of your premium contributions.

Two new tools are now available in Spanish on CuidadoDeSalud.gov to make it easier for small employers to understand and take full advantage of the benefits available from the SHOP.

The new Full-Time Equivalent (FTE) Calculator helps small employers determine if they’re eligible to buy SHOP coverage for their employees, while the new SHOP Tax Credit Estimator lets small employers learn the size of the tax credit they could get for contributing to coverage for their employees through the SHOP.

Here are some key things you should know about the tax credit and applying for SHOP:

Employers with fewer than 25 full-time equivalent employees may be eligible for the Small Business Health Care Tax Credit, worth up to 50% of employer premiums contributions, if their employees make an average of $50,000 a year or less.
The tax credit will be available to eligible employers for two consecutive taxable years.
The tax credit may be available to eligible tax-exempt employers who could receive up to 35% of employer premium contributions, and can access the credit as a refund.
Generally, the Small Business Health Care Tax Credit is available for eligible employers purchasing SHOP health plans.
Visit IRS.gov for the most up to date information and guidance on claiming this tax credit.
Even if you’re a small employer who does not qualify for a small business tax credit, you may still purchase coverage through SHOP.

Apply for SHOP coverage any time, all year

SHOP is open to employers with 50 or fewer full-time-equivalent employees (FTEs) and enrollment is open year- round.

If your state runs its own SHOP, visit your state Marketplace for information on how to calculate FTEs.

Choose your state and we’ll help you get started. If you have questions about the SHOP Marketplace call 1-800-706-7893 (TTY: 711), Monday through Friday, 9 a.m. to 7 p.m. ET. Agents and brokers may also use this number.