Frequently Asked Questions

How much is the credit worth to me?

Great question. For most people it is pretty easy to figure out. If you employ less than 25 people and provide health insurance, you can use this handy calculator to estimate the value of the credit. Of course, this is just an estimating tool. For a more accurate figure, consult your accountant.

I hear the credit is confusing.

For most small business owners, it’s not bad at all. If you know how many people you employ, what you pay them and how much you spend on their health insurance premiums each year, it’s pretty straightforward. Those with a lot of part time employees will need to determine how many full-time equivalents they employ. A quick Google search of “Calculate Full Time Equivalent Employees” will lead you to a number of resources. Your accountant can also help with this.

Someone told me the credit wasn’t worth the effort.

Remember this is a tax credit, not a deduction. Big difference. These credits can range from a couple hundred dollars to well over several thousand dollars.

Consider this, if you employ 10 people at an average wage of $30,000, and pay $200 per month for each employee’s health insurance premium, this credit could be worth $6,720.

I employ a lot of part-timers. How do I determine how many full time equivalent (FTE) employees I have?

This is a great question, and possibly the most tricky part about estimating the value of your credit. The best advice would be to consult your accountant, but for a quick summary there are a number of resources online. For starters, Google “Calculate Full Time Equivalent Employees.”

I file my own taxes and need more information, Where can I get more details? The best place would be to go straight to portion of the IRS site that deals directly with the small business health care tax credit. Visit Site

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