The Small Business Health Care Credit

Earlier this year the Patient Protection and Affordable Care Act (P.L 111-148) created a small business health care credit. Small businesses, including non-profit organizations and churches, may receive a credit for part of their employees’ health insurance premiums (up to 25% of premiums paid by nonprofit employers, 35% for other businesses). A “small employer” has fewer than 25 full-time equivalent employees for the tax year and pays them an average annual wages of less than $50,000 each. This credit is in effect for 2010 – 2013, and will increase in 2014. If you have more than 25 employees, and some of them are part-time, you may still qualify for the credit. Please follow the link for additional guidance from the IRS on the application and calculation of the credit. Note: The IRS has yet to clarify the procedure for claiming the credit for nonprofit organizations.
The Health Care Credit FAQ is here:,,id=220839,00.html