Small Business Health Insurance Tax Credit

Small Business Health Insurance Tax Credit

The Small Business Health Insurance Tax Credit is a federal tax incentive designed to assist small businesses in providing health insurance coverage to their employees.

To qualify, a business must have fewer than 25 full-time equivalent employees, pay average wages below a specified threshold, and contribute at least 50% toward employees’ health insurance premiums. The credit can cover up to 50% of premiums paid for small businesses and up to 35% for tax-exempt organizations. This credit is available for two consecutive tax years, encouraging small employers to offer health benefits and reduce the cost burden on both the business and its employees.