Are you a California small business owner with questions about how The Affordable Care Act legislation passed earlier this past spring affected the California small group health insurance scene? Want to know more about the small business health care tax credit that is a big part of the changes California small business owners are seeing as a result of Health Reform? Well let’s talk about it here at the Vitality Blog – and remember: If you have questions about Health Reform and its effect on your strategic planning, the California health insurance professionals here at Vitality have answers!
Are you a small business or tax-exempt organization that pays at least half the cost of the health insurance coverage for your employees? Well, let’s take a look at how you may qualify for the small business health care tax credit:
What are the eligibility rules for the small business health care tax credit?
The credit is intended to help employers with low and moderate income workers who want to offer their employees health care coverage. In general, if you have fewer than 25 full-time equivalent (FTE) employees and pay wages averaging less than $50,000 per employee per year you may qualify for the credit. Because the eligibility formula is based in part on the number of FTEs, and not the number of employees, employers that have more than 25 individual workers may also qualify if some of their employees are part-time.
How much is the credit and when did it kick in?
Effective January 1, 2010, tax credits are available to qualifying small businesses that offer health insurance to their employees. The tax credit is worth up to 35 percent of the premiums your business pays to cover its workers – 25 percent for nonprofit firms.  In 2014, the value of the credit will increase to 50 percent – 35 percent for nonprofits.
Want more information on the tax credit? Here are Frequently Asked Questions about the Small Business Health Care Tax Credit as provided by the IRS.
[...] change was seen in the group health insurance California employers provide for their employees: California small businesses are eligible for tax credits to help them in their ongoing effort to provide health coverage for their employee [...]