Small Businesses: How To Claim Your Health Insurance Premium Tax Credit

Questions abound!   Here’s an answer:

HOW TO CLAIM THE TAX CREDIT

How does an employer claim the tax credit? The credit is taken on the annual tax return. The IRS will provide information on how tax-exempt employers can claim the new credit.

Does taking the tax credit affect an employer’s deduction for health insurance premiums? Yes. The amount taken for the tax credit must be subtracted from the deduction.

May an employer reduce employment tax payments during the year in anticipation of the tax credit? No. The credit applies against income tax, not employment tax (i.e. withheld income tax, social security tax, and Medicare tax).

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