Small firms can use the small-business health care tax credit to reduce the cost of the employee health insurance premiums they must pay.
The Small Business Health Care Tax Credit can be used to offset costs if a qualified health plan offers through the SHOP Marketplace, and covers at least 50% of the cost of employee-only health plans .
Businesses must pay at least 50% of the cost of an eligible health plan offered to their employees, have less than 25 full-time equivalent employees, and pay an average salary of less than $55,000 to qualify.
Your business's size will determine how much credit you get. The highest credit is, 50% of premiums paid by employers who are small businesses and 35% of premiums paid by small employers that are tax free.
To calculate the average wage, you'll take the total wages paid to full-time equivalent employees and divide by the number of employees.