Small Business Health Care Tax Credit
The Small Business Health Care Tax Credit is a federal tax incentive designed to assist small businesses in providing health insurance coverage to their employees.
This credit is available to small businesses that meet specific criteria, including having fewer than 25 full-time equivalent employees and paying average wages below a certain threshold. The credit can cover up to 50% of premiums paid by eligible employers (35% for tax-exempt organizations).
For example, if a small business pays $10,000 in health insurance premiums annually, and it qualifies for the maximum credit, it could receive a tax credit of $5,000, thereby reducing its overall tax liability. This encourages small businesses to offer health insurance, promoting employee health and retention.
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