IRS Provides Some Employers with Relief for Small Business Health Care Tax Credit

  |  May 2, 2018

Certain small employers that wish to claim the Small Business Health Care Tax Credit for 2017 and later years may get relief under guidance issued by the IRS on April 27. Small businesses as defined by the IRS have fewer than 25 full-time employees.

The Small Business Health Care Tax Credit can benefit small employers who provide health coverage to their employees. Generally, small employers must provide employees with a qualified health plan from a Small Business Health Options Program (SHOP) Marketplace to qualify for the credit. Also, small employers may only claim the credit for two consecutive years.

The relief helps employers who first claim the credit for all or part of 2016 or a later taxable year for coverage offered through a SHOP Marketplace, but don’t have SHOP Marketplace plans available to offer to employees for all or part of the remainder of the credit period because the county where the employer is located has no SHOP Marketplace plans.

The relief allows these employers to claim the credit for health insurance coverage provided outside of a SHOP Marketplace for the remainder of the credit period if that coverage would have qualified under the rules that applied before Jan. 1, 2014.

For information on whether a county had or has coverage available through a SHOP Marketplace, see the “Who Gets the Credit” section of the Small Business Health Care Tax Credit Q&A on IRS.gov.

If you have questions about this guidance or want to learn how REDW can assist with your business tax-related matters, please contact Sandy Abalos.

Comments