Jun 20, 2019

tax credits

Small Businesses Tax Credit

Small Business Tax Credit for offering medical benefits to their Employees.

First check out this video:

Covered California Tax Credit


Who is Eligible?

If you own a small business with 25 or fewer employees. The annual payroll has to average less than $50,000 ( not counting the owner). If you meet those two criteria then you would be eligible for up to a 50% of any premiums you paid for the employees’ medical coverage:

For example:

Employees  10 full-time-equivalent employees 
Wages  $250,000 total, or an average of $25,000 per employee 
Employee Health Insurance Cost paid by Employer  $70,000 
Tax Credit (Year 1)  $35,000 (50%) 
Tax Credit (Year 2)  $35,000 (50%) 
Tax Credit (Year 3)  Not eligible for tax credit 


Big Incentive

This is a great incentive for a small business to offer medical benefits to their employees. The credit can be given for two tax years. If you can’t use it all up in one year you can push it forward as well. Not only is this a financial plus, offering benefits it a smart thing to do. Studies have shown Benefits are something employees or future employee value. A study done by Glassdoor found employees would rather have benefits than a higher base salary. If small business owners want to recruit top talent or want to retain their best employees than having a rich benefits package would clearly be a differentiator.

If you have any questions regard this program please contact me at [email protected] If you have any tax questions please contact a tax consultant.

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