Are You A Small Business? You Need To Take Advantage Of The Small Business Heath Care Credit


Whether Obamacare is good or not remains to be seen.  To lessen the pain for small employers, the IRS does provide for a small business health care credit.  If you are a small business you should take advantage.  

The IRS just issued proposed regulations governing Internal Revenue Code Section 45R which assist in understanding the details of the credit.

Although these are proposed regulations, employers may rely on them for tax years beginning after Dec. 31, 2013, and before Dec. 31, 2014. 

Here are some of the basics of the credit:

  • An eligible small employer (“ESE”) may claim a tax credit for contributions to purchase health insurance for its employees.
  • An ESE is an employer with 25 or fewer full-time equivalent employees with average wages of no more than $50,000.
  • The full tax credit, however, is only available only to an employer with 10 or fewer qualified employees.
  • The contributions must be provided under a “qualifying” arrangement.

The tax credit can equal 50% of the aggregate contributions for premiums.  The proposed regulations go into detail about the requirements of the credit. 

Health insurance is certainly a huge expense, but this may dull the pain.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Gray Reed & McGraw | Attorney Advertising

Written by:


Gray Reed & McGraw on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.