The Internal Revenue Service has issued guidance that provides relief for certain small employers who wish to claim the Small Business Health Care Tax Credit for 2017 and later years but whose businesses reside in counties with no Obamacare small business health insurance available.
The Small Business Health Care Tax Credit can benefit certain small employers who provide health coverage to their employees. Generally, small employers must provide employees with a qualified health plan from a Small Business Health Options Program (SHOP) Marketplace to qualify for the credit. Also, small employers may only claim the credit for two consecutive years.
In general, the relief being provided helps employers who first claim the credit for all or part of 2016 or a later taxable year for coverage offered through a SHOP Marketplace, but don’t have SHOP Marketplace plans available to offer to employees for all or part of the remainder of the credit period because the county where the employer is located has no SHOP Marketplace plans.
The relief allows these employers to claim the credit for health insurance coverage provided outside of a SHOP Marketplace for the remainder of the credit period if that coverage would have qualified under the rules that applied before Jan. 1, 2014.
Notice 2018-27 gives guidance about calculating the credit under these circumstances. The notice does not affect previous transition relief for the credit that was separately provided for 2014, 2015, and 2016.