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Health Care Tax Credit Eligibility for Small Employers

With April 15 approaching, it’s a good time to remind your small employer clients who haven’t yet filed their taxes that they might be eligible for a health care tax credit.

To qualify for this tax credit, a group must:

  • Have fewer than 25 full-time employees,
  • Pay average wages of less than $50,000 a year per full-time equivalent employee, and
  • Pay at least half of employee health insurance premiums.

Employers that qualify can download Form 8941 to calculate their tax credit and use these instructions to complete the form.

The resulting amount can be added to the general business credit on the employer’s tax return.

This information should not be construed as tax or legal advice. Questions your clients or their employees may have about their specific circumstances should be referred to their tax or legal professional.

Published on: March 20, 2018, 02:27 a.m. ET
Last updated on: April 22, 2021, 08:20 a.m. ET