If you’re a small employer, you may be sitting on a tax credit that puts real money back in your pocket, and most business owners don’t even know it exists.
This one often gets overlooked, but it can save you thousands if you qualify. The Small Business Health Care Tax Credit was designed to help small employers who offer health insurance to their teams, and the requirements are simpler than you might think.
To qualify, your business must:
- Have fewer than 25 full-time equivalent employees
- Pay average wages below the annual limit (for 2023, that’s $62,000)
- Offer a qualified health plan through the SHOP Marketplace (or meet a limited exception)
- Cover at least 50% of the employee-only premium
If you qualify, here’s where the money shows up:
• Up to 50% of the premiums you pay (for small businesses)
• Up to 35% (for tax-exempt employers)
• The credit can be claimed for two consecutive years
The credit works on a sliding scale. The smaller the business and the lower the average wages, the bigger the credit. If you’re paying $50,000 toward employee premiums and qualify for a $10,000 credit, that’s $20,000 back over two years.
And here’s the best news: you can still deduct the remaining premium costs. That means you get both a credit and a deduction.
That’s real cash back. Money you can redirect into team growth, software upgrades, or even your profit reserves. It’s not just a tax break. It’s a chance to create real momentum in your business. And the smaller your agency team, the more favorable the credit usually is.
Most agency owners overlook this simply because no one told them it existed. Don’t wait for your accountant to catch it. They often don’t. If you didn’t claim this in past years, you may still be able to amend returns and recover the money.
If you want to see whether you qualify, or how much cash you could unlock, reach out. This is the kind of missed opportunity I don’t let clients overlook.