What expenses are counted for the Small Business Health Care Tax Credit?
If your company only pays a portion of the total cost of the health insurance plan, you should enter the portion that your company pays.
Only premiums for plans where your company has paid more than 50% of the cost of the coverage count towards the credit. For years after 2013, health insurance must be obtained through a Small Business Health Option Program (SHOP) Marketplace.
Premiums for health care coverage that covers a wide variety of conditions, such as a major medical plan, are counted and premiums for certain coverage that is more limited in scope, such as limited scope dental or vision coverage, are also counted. However, if your company offers more than one type of coverage, such as a major medical plan and a separate limited scope dental or vision plan, your company has to pay at least 50% of the premiums for each separate plan to claim the cost for this credit. You can also include amounts paid for employee's participation in a wellness program. Don't include any tobacco surcharges paid as part of the health insurance premiums.
Some states offer tax credits or a premium subsidy to certain small employers that provide health insurance to their employees. The subsidy is usually provided in the form of payments made either directly to the employer or to the employer's insurance company. If the state paid either you or the insurance company, it counts as if you made the payment in meeting the requirement to pay 50% of the health plan premiums.
If a state-administered program (such as Medicaid) makes payments that are not contingent on the maintenance of an employer-provided group health plan, those payments are not taken into account in determining the Federal health care tax credit.
Only premiums for plans where your company has paid more than 50% of the cost of the coverage count towards the credit. For years after 2013, health insurance must be obtained through a Small Business Health Option Program (SHOP) Marketplace.
Premiums for health care coverage that covers a wide variety of conditions, such as a major medical plan, are counted and premiums for certain coverage that is more limited in scope, such as limited scope dental or vision coverage, are also counted. However, if your company offers more than one type of coverage, such as a major medical plan and a separate limited scope dental or vision plan, your company has to pay at least 50% of the premiums for each separate plan to claim the cost for this credit. You can also include amounts paid for employee's participation in a wellness program. Don't include any tobacco surcharges paid as part of the health insurance premiums.
Some states offer tax credits or a premium subsidy to certain small employers that provide health insurance to their employees. The subsidy is usually provided in the form of payments made either directly to the employer or to the employer's insurance company. If the state paid either you or the insurance company, it counts as if you made the payment in meeting the requirement to pay 50% of the health plan premiums.
If a state-administered program (such as Medicaid) makes payments that are not contingent on the maintenance of an employer-provided group health plan, those payments are not taken into account in determining the Federal health care tax credit.
