--- title: HR Informant | health care tax credit description: health care tax credit | Want to know what is the hottest and latest employment law and HR trends and topics? 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[HR Login](http://www.thinkhr.com/hrhotline/login.php) - [Payroll Login](https://iop.intuit.com/login/aclogin.jsf) - 1-888-353-2976 ![HR Allen Consulting Services](https://promotion-payroll-hr.pinnaclehro.com/hs-fs/file-2109694015-jpg/images/mike.blog.final.jpg?width=990&height=198&name=mike.blog.final.jpg) ## [Small Business Health Care Tax Credit](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/bid/68738/Small-Business-Health-Care-Tax-Credit?hsLang=en-us) [Posted on Fri, Dec 02, 2011](https://promotion-payroll-hr.pinnaclehro.com/human-resources-articles/author/michael-allen) - [Tweet](https://twitter.com/share) Small businesses should review IRS guidelines to determine eligibility for the small business health care tax credit. The tax credit is part of the 2010 Affordable Care Act.  According to the IRS, small employers that pay at least half of the premium for employee health insurance coverage may be eligible for the small business health care tax credit. Small tax-exempt organizations may also qualify. The credit is worth up to 35 percent of a small business's premium costs (25 percent for tax-exempt employers). In 2014, this rate increases to 50 percent (35 percent for tax-exempt employers). To qualify, an employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible). A qualifying employer must also pay average annual wages below $50,000. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers. Use this [three step fact sheet](http://www.irs.gov/pub/irs-utl/3_simple_steps.pdf) from the IRS to determine if you qualify. Eligible small employers will use Form 8941 to calculate the credit.  [More information](http://www.irs.gov/newsroom/article/0,,id=223666,00.html) is available from the IRS. 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