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Small Business Tax Credits

Your business might be eligible to receive tax credits that can lower your costs. Use this calculator to get a good estimate of your tax credit.

SHOP Tax Credit Eligibility Requirements

Small employers must meet the eligibility requirements established by the IRS to qualify for the small business tax credit. The basic requirements include the following. (Consult your accounting professional or tax advisor for details related to your specific business.)

  • Have an average of fewer than 25 full-time equivalent (FTE) employees (based on a 40-hour work week and excluding owners, owners' family members, and seasonal employees)
  • Have average annual employee wages below $52,000
  • Pay a uniform percentage (at least 50%) of the cost of each covered employee's health insurance
  • Purchase coverage through SHOP

If you're eligible, you'll claim the tax credit when you submit your federal income tax returns. The tax credit covers up to 50 percent of premium costs for taxable organizations and up to 35 percent for tax-exempt organizations.

Tax Credit Forms and Instructions

Employers that are not tax exempt will claim the credit using IRS Form 8941 (PDF), Credit for Small Employer Health Insurance Premiums.

  • Marketplace identifier: There is no MNsure marketplace identifier. In section 'A' of IRS Form 8941, leave the field titled Marketplace Identifier (if any) blank.
  • Instructions for Form 8941 (PDF) is on the IRS website.

Tax-exempt employers will claim the credit by filing IRS Form 990-T (PDF), Exempt Organization Business Income Tax Return, with an attached form 8941 showing the calculation of the claimed credit.

See IRS Small Business Health Care Tax Credit for Small Employers for more information.

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