Who counts as a full-time employee?
In general, employees who perform services for your business are counted for the Small Business Health Care Tax Credit.
If you pay someone to work for you for 2,080 hours (52 weeks x 40 hours per week) in the year, then that person is considered a full-time employee. If that person works 2,000 hours and has two weeks (80 hours) of paid vacation, that person has still been paid for the full 2,080 hours and is a full-time employee. If a person works more than 2,080 hours, that person still only counts as one full-time employee.
There are a couple types of people who do NOT count as employees for the credit.
If you pay someone to work for you for 2,080 hours (52 weeks x 40 hours per week) in the year, then that person is considered a full-time employee. If that person works 2,000 hours and has two weeks (80 hours) of paid vacation, that person has still been paid for the full 2,080 hours and is a full-time employee. If a person works more than 2,080 hours, that person still only counts as one full-time employee.
There are a couple types of people who do NOT count as employees for the credit.
- Sole proprietors, partners in a partnership, shareholders owning more than two percent of an S corporation, and any owners of more than five percent of other businesses do NOT count as employees for purposes of the credit.
- Family members or dependents of these owners and partners are also NOT counted as employees.
- Seasonal workers also do not count as full-time employees.
