CBG Benefits

The CBG Benefits Blog

Changes for 2014: Small Employer Health Care Tax Credit

Download this Legislative Brief from CBG Benefits: Small Employer Health Care Tax Credit - Changes for 2014For tax years beginning in 2014 or later, there are a few changes coming to the small employer health care tax credit program.  These changes include an increase to the maximum amount of the credit, a requirement that employers obtain group coverage through an Exchange, and a new two-year limit on taking the credit.

Here is a brief overview of the tax credit and the upcoming changes:

Eligible Small Employers

To be eligible for the health care tax credit, an employer must:

  • Have fewer than 25 full-time equivalent employees (FTEs)
  • Pay average annual wages of less than $50,000 per FTE
  • Maintain a “qualifying arrangement.”

However, beginning with the 2014 taxable year, employers must purchase health insurance coverage through the Exchange’s Small Business Health Options Program to be eligible for the credit.

Maximum Amount of Credit

For the 2010 through 2013 tax years, the maximum credit is 35 percent of premiums paid for taxable small employers and 25 percent of premiums paid for tax-exempt small employers.

However, for 2014 and later taxable years, the maximum credit increases to 50 percent of premiums paid for taxable small employers and 35 percent of premiums paid for tax-exempt small employers.

Credit Period Limit

Another change made to this program involves a limit that that makes the tax credit only available to an employer for two consecutive tax years. Based on the proposed rule issued by the IRS in August 2013, the first year of the two-year period is when the employer files with the IRS to claim the credit.

Download our Legislative Brief for More Information

For more information on the small business health care tax credit program and the upcoming changes, please download our detailed Legislative Brief.

Simply fill out the form below to receive your copy:

* First Name: 
* Last Name: 
* Company: 
* Email: 
 

Pin It    

Posted in: Benefits and Insurance, Human Resources, Legislation

Leave a Comment: (0) →