If you’re a small business owner in California, offering health coverage to your employees isn’t just the right thing to do—it might also save you money. Through Covered California for Small Business (CCSB), you may be eligible for a federal tax credit that helps offset the cost of providing health insurance.
What Is the Small Business Health Care Tax Credit?
This credit is designed to support small businesses with fewer than 25 full-time equivalent (FTE) employees. If you meet the eligibility requirements, you could receive up to 50% of your premium contributions back as a credit on your federal tax return.
Key Eligibility Requirements
To qualify for the tax credit through Covered California:
- Your business must have 25 or fewer full-time employees
- The average annual wage for employees must be less than $64,000
- You must contribute at least 50% of the employee-only premium
- Coverage must be offered through Covered California for Small Business
The fewer employees you have and the lower their average wages, the higher your potential credit.
Why This Matters for Your Business
For many small business owners, the cost of health insurance can feel like a burden. The tax credit helps level the playing field, especially for employers competing for talent in California’s competitive labor market.
Offering benefits like health insurance can help:
- Improve employee retention
- Enhance workplace morale
- Position your company as a responsible and attractive employer
How to Claim the Credit
You’ll need to file IRS Form 8941 to claim the tax credit. While the form itself can be complex, we help business owners navigate this process every day.
At Rice Insurance Benefits, we make sure you not only offer the right coverage, but also maximize every available savings opportunity.
Have questions about your eligibility or how much you could save?
Reach out to Rice Insurance Benefits. We’re here to help you make sense of it all.
