Law & Order

Health Care Tax Credit Now Available for Small Companies

Companies that purchase health care insurance and have less than 25 employees may be able to claim a tax credit. The credit varies according to size and average wages.

The maximum credit of 35% of premiums paid in 2010 is available to small-business employers with 10 or fewer workers that have an average salary of $25,000. The rate will increase to 50% in 2014. The credit phases-out gradually for firms with average wages between $25,000 and $50,000, and with the equivalent of between 10 and 25 full-time workers.

The credit took effect on January 1, 2010, and is designed to help small employers that mainly employ low- and moderate-income workers. Eligible companies must contribute at least 50% of their employees’ premiums. Firms can claim the credit for 2010 through 2013 and for any two years after that. Read more information here.

Questions may be directed to Stuart Gosswein at