Small Business Health Care Tax Credit
The IRS Small Business Health Care Tax Credit helps qualified small businesses lower the cost of offering health insurance to employees. If you have a small business in Oregon, you must meet the following minimum criteria to qualify for the tax credit:
- Employ fewer than 25 full-time equivalent employees (not including family members of
owners/partners or seasonal workers who work fewer than 120 days during the taxable year)
- Pay average annual salaries of $50,000 or less per employee
- Pay at least 50 percent of full-time employees’ premium costs
- Purchase a certified medical or dental plan
The maximum tax credit is 50 percent of the amount you pay toward your employees’ premium costs (35 percent for tax-exempt employers). You do not need to offer coverage to your part-time employees or to dependents to qualify for the tax credit.
Follow these four steps to claim the tax credit when you file your taxes:
- Purchase a certified medical or dental plan directly from a participating insurance carrier.
- Inform your insurance carrier that you want to apply for the tax credit – your agent can do this for you.
Your insurance carrier will then contact the Oregon Health Insurance Marketplace to request a letter confirming that the plan you purchased is certified.
- Receive confirmation letter from the Oregon Health Insurance Marketplace.*
The Oregon Health Insurance Marketplace will send the letter to you, your agent, and your insurance carrier.
- File the confirmation letter with your taxes when applying for the small business tax credit.
* Note: The Oregon Health Insurance Marketplace does not determine eligibility for the IRS Small Business Health Care Tax Credit; we only confirm that the plan purchased is certified.
If you have questions, e-mail shop.marketplace@oregon.gov