Small Business Health Care Tax Credit

The Small Business Health Care Tax Credit helps small businesses that give health care coverage to their workers. This credit is for businesses with fewer than 25 full-time workers with average wages under $50,000 a year.

This credit is part of the Patient Protection and Affordable Care Act. This act encourages small businesses to offer health insurance.

Maximum credit:

• 50 percent of health care premiums paid by small businesses
• 35 percent for tax-exempt groups

To get the credit, small business owners must:

• Have fewer than 25 full-time workers for the tax year
• Pay less than $50,000 per full-time worker in average yearly wages
• Pay the premiums under a "qualifying arrangement." This means the employer pays premiums for each worker in health care coverage. The employer must pay at least 50 percent of the premium cost.