The Small Business Health Care Tax Credit "is intended to encourage small employers to offer health insurance to their employees. The maximum tax credit was 35% of the employer’s premium payments made on behalf of employees in tax years 2010 – 2013."

Per the Government, "this credit amount will increase to 50% of the employer’s premium payments beginning in the 2014 tax year. It is important to note that to be eligible for the Small Business Health Care Tax Credit; the employer must have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less."

To be eligible for the full amount of the tax credit the company must have fewer than 10 full-time equivalent employees making an average of about $25,000 a year or less. (The Owner may typically be excluded from these calculations.)

To qualify for the Small Business Health Care Tax Credit, "the employer must pay at least 50% of full-time employees' premium costs (employee only coverage). The employer does not need to offer coverage to part-time employees or to dependents. Beginning in 2014, only premiums paid by the employer for employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP Exchange) are counted when calculating the credit."

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