Maximize Your Clients’ Health Care Tax Credit

Ensure your clients and prospects receive the maximum amount of tax credits by leveraging the small business Health Care Tax Credit now. Below are key insights on why this tax credit matters and how to take advantage of it.

Insights and Tips to Strengthen Your Sales Strategy

• Unlock New Opportunities – Many small employers can now afford to offer health coverage for the first time.
• Boost Conversions and Retention – A tangible tax credit provides a compelling financial incentive.
• Create Urgency – The tax credit is maximized when businesses enroll in Covered California for Small Business (CCSB) early in the year.

Who Qualifies?

To be eligible, businesses must:

• Have less than 25 full-time equivalent employees (FTEs). Owners and immediate family members of the owner are excluded.
• Pay employees an average annual wage of less than $67,000 per year (adjusted for inflation since 2014).
• Contribute at least 50% of employee health insurance premiums.

For-profit small businesses may be eligible for tax credits of up to 50% of employer-paid premiums, while tax-exempt employers can receive up to 35%. The credit is available for two consecutive tax years and applies only to businesses purchasing coverage through CCSB.

Eligibility is determined on a sliding scale—the smaller the business and the lower its average wages, the greater the tax credit. Employers can apply the credit directly to their Federal Tax Return. Use the CCSB Tax Credit Calculator to estimate potential savings.

Calculate The Tax Credit

Example of a small business receiving tax credits for health insurance:

Resources

• CCSB Small Business Tax Credit
• IRS Healthcare Tax Credit Web Site (Q&A and Form 8941 instructions)
• Healthcare.gov Tax Credit Estimator

Act Now to Maximize Savings

If you have clients who may qualify, don’t wait. Our team of tax credit experts is ready to assist you. Contact The Answer Team today at 800.696.4543 or info@claremontcompanies.com.

*The Health Care Tax Credit is a dollar-for-dollar tax reduction, making it more valuable than a standard business deduction, which only lowers taxable income.

“Covered California”, “California Health Benefit Exchange”, and the Covered California Logo are registered trademarks or service marks of Covered California, in the United States.