The ACA and Tax Credits For Small Businesses

Currently, due to the Affordable Care Act (ACA), eligible small businesses with as many as 25 full-time employees will qualify for tax credits designed to decrease insurance premium costs. This year, the maximum tax credit is 35 percent for small business owners and 25 percent for small, non-profit organizations that are tax exempt. 

This will  increase for January 2014 and beyond to 50 percent for small businesses and 35 percent for small, non-profit organizations. 

Small businesses are required to buy policies through the California marketplace for small businesses. This marketplace is SHOP, and it stands for Small Business Health Options Program. 

How do you determine if your own small business qualifies? Businesses with 25 full-time employees or less and earning an average annual income of $50,000 or less qualify for the tax credits. Your accountant can help you determine if your small business qualifies. 

The maximum tax credit is only available to companies having 10 or fewer full-time equivalent employees that are paid an annual salary or wage of $25, 000 or less. Once again, keep in mind that policies must be bought through SHOP. 

For more information about small business finances and insurance, contact Pilkington Financial Services serving the Sterling, Colorado area.