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SHOP Marketplace basics for employers

The Small Business Health Care Tax Credit

You may qualify for the Small Business Health Care Tax Credit that could be worth up to 50% of the costs you pay for your employees' premiums (35% for non-profit employers).

See if you qualify for savings

Enrolling in a Small Business Health Options Program (SHOP) plan is generally the only way for a small business or non-profit to claim the Small Business Health Care Tax Credit. To qualify for the tax credit,ย allย of the following must apply:
  • You have fewer than 25 full-time equivalent (FTE) employees
  • Your average employee salary is about $56,000 per year or less
  • You pay at least 50% of your full-time employees' premium costs
  • You offer SHOP coverage to all of your full-time employees. (You don't have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)
Notice:
IMPORTANT
The IRS has released guidance on qualifying for the Small Business Health Care Tax Credit that may apply to small employers in areas with no available SHOP plans.ย Learn more.

Higher benefits for smaller businesses

The tax credit is highest for companies with fewer than 10 employees who are paid an average of $27,000 or less. The smaller the business, the bigger the credit.

Questions?

More answers: The Small Business Health Care Tax Credit