Reform Alerts - News from the Blues' Office of Health Reform

Small business tax credit instructions released

February 3, 2015

On Dec. 12, 2014, the Internal Revenue Service released instructions for claiming the 2014 small business tax credit. 

Here's what makes a small employer eligible for the tax credit. 

  • It has fewer than 25 full-time equivalent employees
  • The average annual wages of its employees is less than $50,000
  • It pays a uniform percentage of the health insurance premiums (at least 50 percent) on behalf of each employee enrolled in a qualified health plan offered through the Small Business Health Options Program

A small employer may claim the credit for no more than two consecutive tax years.

Full credit is available to eligible small employers of up to 10 full-time employees with an average annual wage of $25,000 or less.

For more information about the tax credit, take a look at Credit for Small Employer Health Insurance Premiums (PDF) from

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.