Is the Small Business Healthcare Tax Credit still available?

With all the talk about repeal, replace and changing regulations, you might have thought the Small Business Healthcare Tax Credit provision in the ACA would have been terminated, but it is alive and well and there is still money available for your clients if they are eligible. This is an excellent and sometimes overlooked financial reward for small employers in low wage industries to encourage them to offer coverage and may be a source of new clients.

To qualify for the tax credit, the business must:

• Purchase coverage through Covered California for Small Business (CCSB).
• Have fewer than 25 employees.
• Have average wages of approximately $50,000 or less.

If the employer meets these requirements, they could be eligible for up to a 50% tax credit (35% for non-profits). The dollar value of the credit is based on how much the employer contributes towards the employees’ (and dependents’) premiums. The credit works on a sliding scale; companies with 10 or fewer employees and average wages of $25,000 or less qualify for the maximum, while companies with employee counts and average wages near 25 and $50,000, respectively, will qualify for the least.

Claremont has been working with CCSB since its inception in 2014 to help assist agents and their clients in understanding the tax credit. We will even provide an estimate of the potential tax credit for which your client may qualify. And don’t forget a tax credit is far more valuable than a tax deduction or a deductible expense. A credit allows the for-profit employer to reduce their tax bill by the amount of the credit earned.

We have a crafted this Health Care Tax Credit Solution and posted it on our web site. It provides all the information you need in order to discuss this great program with your clients.