Question

I am claiming the premium tax credit of health care premiums for employees. I am eligible to claim 35% of these premiums. How do I claim health care tax credit?

Answer

Assuming by your question that you are a small-business owner and you are claiming the premium tax credit available to you which is 35% of the health care premiums you paid out. To claim the maximum credit of 35% of premiums paid you must be a tax-exempt eligible small employer. For all other eligible small employers, the maximum credit is 50% of premiums paid.

You are an eligible small employer if you meet the following criteria:

  • You paid premiums for employee health insurance coverage under a qualifying arrangement.
  • You had fewer than 25 full-time equivalent employees (FTEs) for the tax year.
  • You paid average annual wages for the tax year of less than $52,000 per FTE.

If you meet the above criteria you will need to determine your small-business employer health care credit on Form 8941: Credit for Small Employer Health Insurance Premiums.

This form will help you determine the correct figure to include on Form 3800: General Business Credit, Part II.

Related Topics

Related Resources

What Is Head of Household and Who Can Claim It?

Head of household is a filing status for single or unmarried taxpayers who have maintained a home for a qualifying person, such as a child or relative. This filing status provides a larger standard deduction and more generous tax rates for calculating federal income tax than the Single filing status.

First Time International Taxpayer | H&R Block

Get a better understanding of taxes for immigrants, expats and green card holders. This guide helps answer basic questions about special filing circumstances.

Form W-4 End of Year Updates | H&R Block

Tax season is right around the corner! Consider how the withholding allowances claimed on your Form W-4 could affect your income tax refund by visiting the Tax Information Center blog.

Taxes Get Personal: What’s Your Filing Status?

Do you know what your tax filing status is? Learn how to determine and check your tax filing status with H&R Block.