Estimate Your Health Care Reform Small Business Tax Credit
Health Care Reform includes tax credits to help employers offset their health insurance premiums. Use our federal tax credit estimator to learn if your business may be eligible for federal tax credits, and see how much your business may be able to save.
Use this tool to determine your estimated tax credit for medical, and standalone dental and vision plans.
1. Does your company offer health insurance? ?
2. Is your insurance through the Small Business Health Options Program??
3. Tell us about your hourly and salaried employees. ?
Note: Please exclude the hours, wages or premiums for owners, partners, certain shareholders, and family members. Employees must work more than 120 days per year. For questions regarding specific part-time salaried worker scenarios, contact your tax advisor.
Add hourly employees Add salaried employees
4. Tell us about your annual insurance premiums, contributions, and location. ?
Note: Family insurance equals any coverage other than employee-only. Please exclude the hours, wages or premiums for owners, partners, certain shareholders, and family members (refer to the ? icon for more detail).
The charts used in this section are taken from the IRS instructions for the 2012 Form 8941. This section will be updated with the new charts when issued by the IRS.
Is your business tax exempt? ?
Does your company offer health insurance?
Does your company offer its employees health insurance, regardless of the number of employees who participate in the plan(s)?
Small Business Health Options Program
The Small Business Health Options Program (SHOP) is the government's health insurance marketplace in a given state.
Tell us about your hourly and salaried employees.
Click the "Add Hourly Employees" and "Add Salaried Employees" buttons to enter information about all employees who work over 120 days per year, excluding owners, partners, and family members. According to the IRS, a sole proprietor, a partner in a partnership, a shareholder owning more than two percent of an S corporation and any owner of more than five percent of other businesses are not considered employees for purposes of the credit. Thus, the wages or hours of these business owners and partners are not counted in determining either the number of FTEs or the amount of average annual wages, and premiums paid on their behalf are not counted in determining the amount of the credit.
Tell us about your insurance premiums, contributions, and location.
Click the "Add Insurance" button to provide information about each plan you offer. Enter the state where your employees work, the number of employees who participate in your company's employee-only and family health insurance plans, the premium of each plans (employer and employee share), and how much you contribute as a percentage of the premium amounts. If no employees participate in your employee-only health insurance plan, please enter the cost of an employee-only plan, as it may affect your estimated tax credit.
According to the IRS, a sole proprietor, a partner in a partnership, a shareholder owning more than two percent of an S corporation and any owner of more than five percent of other businesses are not considered employees for purposes of the credit. Thus, the wages or hours of these business owners and partners are not counted in determining either the number of FTEs or the amount of average annual wages, and premiums paid on their behalf are not counted in determining the amount of the credit.
Is your business tax exempt?
Tax exempt businesses typically qualify for a smaller tax credit amount.
Paychex Insurance Agency, Inc.
Small Business Tax Credit Estimate - Detailed Report
Employee Hours and Wages
(total hours % 2080)
Health Insurance Costs
||Total Annual Premium ($)
Total Tax Credit:
The tax credit is of your total contribution
DISCLAIMER: The information in this estimator is not legal or accounting advice and it should not substitute for legal, accounting, and other professional advice. The estimated tax credit above is not a guarantee and is provided for informational purposes only. The estimated tax credit assumes eligibility for the tax credit and is estimated using the average state premium for family coverage and employee-only. Your actual tax credit will be reduced if your premiums are greater than your state's average premium. The actual tax credit is also dependent on the calculation method used to determine full time equivalency. Consult your tax advisor to determine if you are eligible for a tax credit and to determine your actual tax credit. For more information on the tax credit and the calculation used to estimate your tax credit, click here.
ESTIMATED TAX CREDIT
In estimating the tax credit Paychex assumed that the health insurance coverage your company offers is qualified as defined under the small business tax credit provision of the Patient Protection and Affordable Care Act and based the estimated tax credit on state average premiums. Paychex determined full-time equivalency by using actual hours and salary (based on a 40-hour work week). However other methods can be used which may affect your actual tax credit.
Tax credits are limited based on the average premiums in each state. Click here to review the IRS state average premium chart.
Credit itself is applied against business taxes for non tax-exempt businesses (not individual tax outcomes), and against Medicare and withholding for tax-exempt businesses.
The Department of Health and Human Services and the Internal Revenue Service (IRS) continue to provide specifics and guidance on the Health Care Reform Act. If you require legal or accounting advice, or need other professional assistance, you should always consult your licensed attorney, accountant, or other federally licensed tax professional to discuss your particular facts, circumstances, and business needs.