Beginning in 2010, Arizona small businesses that provide their employees with health insurance may qualify for a tax credit of up to 35% of the premium cost.
To qualify, an employer must pay at least 50% of the insurance premium, have less than 25 employees, and the employees’ average annual income must be less than $50,000. Since the eligibility rules are actually based on the number of full-time equivalent employees, you may qualify even if you have more than 25 employees.
The highest tax credit (up to 35%) will go to employers with 10 or fewer employees, with annual wages of $25,000 or less. In 2014, the tax credit will increase and be worth up to 50%.
Please note that owners of the business are not included when you add up the number of employees and average wages.
If you are a business owner and are interested in getting a health insurance quote, please give us a call at 1-800-600-9663, or fill out our Arizona small business health insurance form.
For more information about the new tax credit, visit IRS.gov:
Small Business Health Care Tax Credit for Small Employers
Note to tax professionals:
Many of our clients are seeking professional tax advice relating to the new health care tax credit. Please feel free to leave a comment below if you are interested in reaching out to our clients.
Nice article.
I would add that there is a way to access the health care tax credit by wrapping a limited medical benefits program with a high deductible HMO.
I provide the example here:
franchise-info.ca/supply_chain/2010/07/Small-business-tax-credits.html