Must a small business be enrolled in Covered California for Small Business for all of 2014 to qualify for tax credit? Is credit prorated if enrolled for half the year?

No, a small business need not be enrolled in Covered California for Small Business for all of 2014 to qualify for the tax credit if the following conditions are met:

(i) the employer offers coverage in 2014 that begins on a date other than the first day of its taxable year;

(ii) the employer offers coverage during the period before the first day of the plan year beginning in 2014 that would have qualified the employer for the credit; and

(iii) the employer begins offering coverage through Covered California for Small Business as of the first day of its plan year that begins in 2014.

If these conditions are met the employer will be treated as having offered coverage through Covered California for Small Business for its entire 2014 taxable year. Thus, the credit will be calculated at the 50% rate for the entire 2014 taxable year and the 2014 taxable year will be the start of the two-consecutive-taxable year credit period.