What is a Small Business Tax Credit?

A Small Business Tax Credit is a tax credit designed for small businesses to help offset a portion of their cost of offering health insurance to their employees. The tax credit may cover up to 50% of an employer’s costs or (up to 35% for qualifying non-profits). The Small Business Tax Credit will be available for two consecutive years. Businesses will receive the tax credit when they file their income taxes.

To be eligible, a Colorado employer must:

• Have fewer than 25 full-time equivalent employees (FTEs)
• Have an average employee wage of less than $53,000 a year (as of tax year 2017)
• Pay a minimum of 50% of the premium cost for single coverage for each employee (uniformity rules apply)

To estimate whether or not you may be eligible for a tax credit, you can use our Small Business Tax Credit Calculator.

For more information, visit the IRS website.