Small Business Health Care Tax Credit Scenarios

New Page on IRS.gov helps Small Employers with Tax Credit for Providing Health Insurance Coverage. Scenarios that explain how much certain businesses and exempt organizations would benefit from the credit are below.


Examples of Employers Receiving the Credit


Example 1: Auto Repair Shop with 10 Employees Gets $24,500 Credit for 2010
Main Street Mechanic:
- Employees: 10
- Wages: $250,000 total, or $25,000 per worker
- Employee Health Care Costs: $70,000
2010 Tax Credit: $24,500 (35% credit)
2014 Tax Credit: $35,000 (50% credit)


Example 2: Restaurant with 40 Part-Time Employees Gets $28,000 Credit for 2010
Downtown Diner:
- Employees: 40 half-time employees (the equivalent of 20 full-time workers)
- Wages: $500,000 total, or $25,000 per full-time equivalent worker
- Employee Health Care Costs: $240,000
2010 Tax Credit: $28,000 (35% credit with phase-out)
2014 Tax Credit: $40,000 (50% credit with phase-out)


Example 3: Foster Care Non-Profit with 9 Employees Gets $18,000 Credit for 2010
First Street Family Services.org:
- Employees: 9
- Wages: $198,000 total, or $22,000 per worker
- Employee Health Care Costs: $72,000
2010 Tax Credit: $18,000 (25% credit)
2014 Tax Credit: $25,200 (35% credit)