Does my business qualify for a health insurance tax credit?

The Affordable Care Act, aka Health Care Reform, includes a tax credit for certain small businesses to offset employer paid premiums.  This credit became available in Tax Year 2010 and is available for 2011 – 2013.  However, beginning in 2014 and beyond, the credit is limited to two consecutive years via Exchange products only.

The credit is only available to employers (both for-profit and non-profit) with 25 or fewer full-time equivalent employees (FTEs) and average annual salary below $50,000.  The full credit with for-profit employers equals 35% in 2010-2013 and increases to 50% in 2014 and beyond.  Non-profits are reduced to a maximum credit of 25% in 2010-2013 and increases to 35% in 2014 and beyond.  The credit phases out proportionately between 11 and 25 FTEs and $25,000 and $50,000 average annual salary.  Eligible premiums for this credit are also capped at the average state premiums.

Employers may also use premium contributions as a deductible expense, but must be adjusted for the tax credit received.  Non-profits that have no tax liability  may receive a refundable credit to the extent that it offsets payroll taxes such as Medicare withholding.  Please seek the advise of your tax preparer for specific details.

Small businesses throughout Virginia and West Virginia may contact Creekside Insurance Advisors, LLC for savings on group health insurance rates and updated information on state-specific options and Health Care Reform at


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