Small Business Health Care Tax Credit

What is the Small Business Healthcare Tax Credit?

Small businesses that provide coverage to their employees through SHOP may qualify for a small business health care tax credit worth up to 50% of your premium costs. Small business owners can still deduct from your taxes the rest of your premium costs not covered by the tax credit.

Starting in 2014, the small business health care tax credit will only be available to small businesses that offer a group health plan to their employees through Your Health Idaho’s SHOP marketplace.

Who qualifies for the tax credit?

Some small businesses with fewer than 25 full-time equivalent employees earning an average of about $50,000 a year or less, may be eligible for a the small business health care tax credit starting in 2014, if they purchase employees’ insurance plans on the Your Health Idaho insurance marketplace.

To qualify for the small business health care tax credit, business owners must pay at least 50% of their full-time employees’ premium costs and select a plan available through Your Health Idaho. You are not required to offer coverage to your part-time employees or to employees’ dependents in order to qualify.

The tax credit available for policies beginning on January 1, 2014 is worth up to 50% of your contribution toward employees’ premium costs, (up to 35% for tax-exempt employers).

Below is an example of a tax credit for a small business employer who qualifies for the maximum tax credit worth 50% of their premium contribution in 2014:


To find out if you qualify for the small business health care tax credit you can visit the IRS website HERE. Additionally, you can also consult with an agent or broker and your tax advisor or accountant to learn if you qualify.

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