Is your business eligible for the federal health insurance tax credit? Here's how to calculate

Ninety-two percent of Missouri small businesses may be eligible to receive the federal Small Business Health Insurance Tax Credit, according to a study by a pair of nonprofit organizations.
Small businesses can qualify to receive up to 35 percent of health premiums paid by employers. The study by Families USA and Small Business Majority found that 85,100 businesses in Missouri would be eligible for at least part of the tax credit.
To qualify for the maximum credit, a business must:
• Employ 10 or fewer workers
• Have an average wage of less than $25,000
• Pay for at least half the cost of the health premiums for each employee
(Nonprofit businesses can only receive up to 25 percent.)
To qualify for any percentage of the credit, a business must:
• Employ 25 or fewer workers
• Have an average wage of less than $50,000
• Pay for at least half the cost of the health premiums for each employee
The tax credit takes effect this year and will continue through 2013. In 2014, an enhanced tax credit takes effect, and businesses may be able to receive up to 50 percent.
For the number of employees, two half-time workers will count as one full-time worker.
Here is a way to calculate if your business is eligible:
Step 1
• Take the number of hours worked by employees and divide by 2,080. That’s the number to use for total employees
Step 2
• Add up the total annual wages paid to employees, and divide by the number of employees from Step 1. That figure is the average wages.
Step 3
• Take the total amount of premiums paid by the employer, and subtract premiums paid for owners and their families, and divide by the total health insurance premiums paid. That figure is the percentage of premiums covered by employer.
Small businesses are not required to offer health coverage. However, businesses with more than 50 employees may receive penalties if they do not. Such firms will have to provide health insurance or pay a penalty of $2,000 per worker if any receive government-subsidized coverage.
Information about calculating eligibility from the IRS and William-Keepers LLC.