How to Claim the Small Business Health Care Tax Credit

If you participate in the Small Business Health Options Program (SHOP), you may qualify for the Small Business Health Care Tax Credit and state premium assistance programs. The maximum tax credit is 50% of premiums paid for small business employers and 35% of premiums paid for small tax-exempt employers. To qualify for the tax credit, you must have the following:

• Fewer than 25 full-time equivalent (FTE) employees
• An average employee salary of $56,000 per year or less
• A contribution of at least 50% of employee-only premium costs
• An offer of coverage for all full-time employees

To learn more about how to qualify for the Small Business Health Care Tax Credit, click the button below!

Employers must use Form 8941, Credit for Small Employer Health Insurance Premiums, to claim the Small Business Health Care Tax Credit on their annual income tax return. For detailed information on filling out this form see the Instructions for Form 8941.

Have questions? Contact your insurance company or a SHOP-registered agent or broker for help with SHOP coverage. For additional assistance, contact the SHOP Call Center at 1-800-706-7893 (TTY: 1-888-201-6445).

To learn more about Health Reimbursement Arrangements (HRAs), visit this webpage. Talk to a licensed tax professional, benefits specialist, or a registered agent or broker to find out more about whether an HRA or traditional group coverage is right for your business.