Small Business

Does my business qualify?

How much will my tax credit be?

How do I claim my tax credit?

 


Does my business qualify?

To earn your tax credit, your business must meet all 3 of the following criteria:

  1. The business employs fewer than 25 full-time-equivalent (FTE) employees
  2. The average annual wage of your workers is less than $50,000
  3. You, the business owner, pays at least 50% of the premium costs for employee-only coverage

Keep in mind that part-time employees can be added together to equal FTE employees.  Seasonal employees are not counted when determining eligibility unless they work more than 120 days. during the year.  The owner’s salary is not included in the calculation of workers’ average annual wage for the tax credit and the owner and the owner’s family members are not eligible for the small business health care tax credit but may apply for individual tax credits.

How much will my tax credit be?

The value of the tax credit is based on the business owner’s contribution to employee health care.  The tax credit is applied on a sliding scale with a maximum credit of 35% available for businesses with fewer than 10 employees averaging less than $25,000 in annual wages.  This credit phases out at 25 employees averaging $50,000 and above in annual wages.

If your business participates in the Maryland Health Insurance Partnership, a state grant program that provides grants to help small businesses start providing health care, it will not decrease the amount of your tax credit.

Also, beginning in 2014, eligible small businesses purchasing coverage through Maryland’s Insurance Exchange will receive a tax credit of up to 50% of the employer contribution if the employer provides at least 50% of the employees’ premium cost.  A business can claim the credit for any two years in the future.

Use the tax calculator below to estimate the amount of your tax credit TODAY!

 

Tax credit calculator

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Note: This is a preliminary estimate, and is contingent upon accurate inputs for FTEs, average
wages, and employer premium contribution as defined by the provisions of the healthcare
legislation. See http://www.irs.gov/newsroom/article/0,,id=220839,00.html for more information.

 

How do I claim my tax credit?

Talk with your accountant and/or tax preparer!  Make sure that he or she fills out Form 8941 to claim your credit.

Don’t have an accountant or tax preparer? Call us at (410)235-9000 to speak with our knowledgeable staff!

If you currently don’t offer health care and are interested in beginning, or you’d like to compare plan costs, visit CareFirst BlueCross BlueShield for more information on health care plans for your business and the federal tax credit at www.carefirsttaxcredit.com.

 

Or for information on multiple health insurance options, the state of Maryland has created VIRTUAL COMPARE, a website that allows small business owners to easily shop for and compare health insurance plans.  Visit VIRTUAL COMPARE by clicking here.