Tax Credits

Review Tax Credits for Your Business

If you qualify for the Small Business Health Care Tax Credit, you may get a break on the costs you pay for group health insurance. You may be eligible for a tax credit if:

  1. You employ fewer than 25 FTE (full-time-equivalent) employees.
  2. You purchase group health insurance through One, Mississippi for Small Business.
  3. You pay at least half of the premium costs for employees’ insurance coverage.
  4. You haven’t claimed the credit in the past two years. (Employers can claim the tax credit for no more than two consecutive tax years beginning in 2014 or later.)

How much is the credit?

Use the Tax Credit Estimator available at the IRS website. The maximum credit is 50% of premiums paid on behalf of employees. The maximum credit for small nonprofit employers is 35%. The tax credit phases out based on the number of employees and average wages. Consult a tax advisor or attorney for more information.

How do you claim the credit?

You must use Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate the credit. For detailed information on filling out this form, see the Instructions for Form 8941.
If you are a small business, include the amount as part of the general business credit on your income tax return. Consult a tax advisor or attorney for more information.

Need more information?

The IRS has developed a website dedicated to the Small Business Health Care Tax Credit and the SHOP Marketplace