Small Business Health Insurance  Tax Credit in Ct


Small Business Health Care Tax Credit


CT Small businesses may be eligible for a federal tax credit based on health insurance premiums paid for employees by employers. As part of the health care reform effort, the federal government is providing an incentive for small businesses to provide health insurance coverage for their employees. The Small Business Health Care Tax Credit provides a federal tax credit of up to 35% of employer-paid health insurance premiums.

The Small Business Health Care Tax Credit was enacted as part of the 2010 Affordable Care Act. This Credit is aimed at defraying the high cost of group health insurance coverage for empoloyees.

The tax credit is available to businesses that have 25 or less employees and, pay average salaries of $50,000 or less and the business must pay at least half of the employee health insurance premiums.

The amount of the tax credit a business receives works on a sliding scale. The smaller the business . . the bigger the credit. Businesses that have more than 10 full time employess or if the average wage is more than $25,000, the amount of the credit the business will receive will be less.

The health care laws are new and constantly evolving. Many businesses are just beginning to understand the thousands of complex provisions.

From what we have seen, the tax calculations will change if the buisness uses part-time employees, or if the owner and his or her family purchase their insurance separately, or if the buisness has a mix of individual and family policies in its pool of insurances.

Lastly the Small Business Health Care Tax Credit is not refundable and is not transferable. The tax credit can only be used to offset actual federal tax liabilities.

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