Has your business enjoyed the small business health care credit for the last few years? Well, get ready because changes are coming in 2014.
For now, the small business health care credit is still available for the 2013 tax year. As it stands, small businesses can receive a maximum credit of 35 percent of premiums paid for employees, and small tax-exempt businesses can receive 25 percent. Currently to qualify, a company must have fewer than 25 full-time equivalent employees, average annual wages under $50,000 and pay for at least 50 percent of the premiums for employees.
Small Business Health Care Credit Changes for 2014
With a flurry of tax law changes and new tax provisions for 2014, your head may be spinning as you try to keep up with all of the changes. As it relates to small business health care credit changes for 2014, here’s what you should know:
- Starting in 2014, only businesses that purchase insurance through the Small Business Health Options Program (SHOP) will be eligible for the small business health care credit. If you’re unfamiliar with SHOP, this is the small business portal to the health insurance exchange for companies under 50 employees (or under 100 employees in some states for 2014). Due to some delays with the implementation of SHOP, you may have a bit of difficulty determining if SHOP is a good option for your business in 2014.
- Businesses that elect the small business health care credit in 2014 will only be eligible to do so for two consecutive years.
- Small tax-exempt businesses will be eligible in 2014 to have 35 percent of premiums paid, while small businesses will be eligible to have 50 percent of premiums paid.
Claiming The Small Business Health Care Credit
Small Business Health Care Credit Help
Not sure if or how your company can benefit from this type of credit? Contact Rea & Associates. Our Ohio tax professionals can help you figure out how you can make this small business health care credit work for your business.