8840 / What tax credit is available for employers who purchase health insurance? When does the credit become available?

The new tax credit is effective for 2010 and thereafter. Beginning in 2014, it is only available for two consecutive years. Thus, the maximum number of years that an employer can take advantage of this tax credit is six, namely 2010 through 2013, plus any two consecutive years beginning in or after 2014.²

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Planning Point: The IRS provided relief for small employers who wish to claim the small business health care tax credit, but did not have access to a small business health options program (SHOP) marketplace plan for 2017. Under IRC Section 45R, certain small employers may claim a tax credit for two consecutive years if they provide qualified health coverage to employees. However, some employers who first claimed the credit in 2016 found that they no longer had access to a SHOP plan beginning in 2017. These employers were permitted to claim the credit with respect to health insurance coverage provided outside of the SHOP marketplace for the remainder of the credit period if the coverage that is provided would have qualified for the credit under the rules that applied before January 1, 2014.³

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