Can you claim the small employer health insurance tax credit?

The small employer health insurance tax credit was enacted as part of the Patient Protection and Affordable Care Act (Obamacare).  The purpose of this part of the law is to help small employers defray some of the cost of providing health insurance for their employees.

Prior to 2014, employers often found that complex calculations yielded very little or no credit at all.  For 2014, the maximum credit has increased from 35% of employer paid premiums to 50%.

To qualify, the employer must:

  • Pay at least 50% of the cost of single employee coverage under a qualifying plan.
  • Have fewer than 25 full time equivalent employees.
  • Pay average yearly wages for less than $50,800 for 2014.
  • Owners and their families are excluded from these calculations.

Owners and their families are excluded from these calculations.

The credit phases out between 10 and 25 employees and wages of $25,400 to $50,800.

Beginning in 2014, an employer can only claim the credit for 2 years.

As always, this is only meant as a brief overview.  If you feel that we can be of further assistance to you, please contact our office to set up an appointment.

Email us at: [email protected]

Call us at: 302-239-3500

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– Doherty & Associates Team





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