Tax Credits: Helping you with the Cost of Health Care
See if you qualify for a Premium Tax Credit that could benefit your business!
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Your small business or nonprofit organization may be eligible for federal premium tax credits to help reduce the cost of health insurance for employees with Maryland small business health coverage purchased on the SHOP.
To Qualify, Small Employers Must:
- Contribute at least 50 percent of the cost of employee premium costs.
- Employ fewer than 25 full-time employees.
- Pay an average annual salary of less than $50,000, excluding the wages of owners and their family members that may work for the company.
Note: Employers with 10 or fewer full-time employees paying an average annual salary of $25,000 or less are eligible for the maximum tax credit.
How to Claim the Tax Credit:
- An employer claims the credit on their annual income tax return with IRS Form 8941. Please click on Q&A for additional details.
- For questions regarding the tax credit or how to complete the form, please call the IRS tax form assistance at 1.800.829.3676.
Important Notes:
- Owners are excluded, and should not be counted in number of employees, wages or premium contribution amount.
- Tax credits can’t be larger than actual income tax liability.
- The health care tax credits and deductions are available only if you get coverage through the SHOP.
- All of your personal information is confidential and will not be saved in our system. It will be deleted automatically when you are finished using the calculator.
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Example for an employer who QUALIFIES for the maximum credit worth 50% of their premium contribution in 2014:
- Number of Employees: 10
- Wages: $250,000 Total or $25,000 per Employee
- Employer Contribution to Employee Premiums: $70,000
- Tax Credit Amount: $35,000 (50% of Employer’s Contribution)
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