As tax season approaches, it’s important for small group employers who offer health care coverage to their employees to understand key tax credits in the Patient Protection and Affordable Care Act (PPACA).  To help take advantage of these potentially valuable credits, some of the basics are outlined for you*:


  • An eligible employer must provide health care coverage and must contribute 50% of the cost of the health care premium.
  • A qualifying employer must have less the “equivalent” of 25 full-time employees (employers with fewer than 50 part-time workers may also qualify)
  • The average annual wage for the full-time equivalents must be below $50,000

Amount of Credit:

  • The maximum credit could be up to 35% of a qualified, for-profit employer’s contributions to health insurance.
  • Tax-exempt employers could qualify for up to 25%
  • In January 2014 the for-profit rate increases to 50% and the tax-exempt rate to 35%


Tax form 8941 required information:

  • Number of employees and total hours of service for each
  • Annual wages for each employee
  • Employer paid premium
  • Taxable or tax-exempt status

For more detail information consult the IRS website.

*BCA does not provide legal or financial advice.  Employers should consult their legal or tax advisor for additional information.