Affordable Care Act tax provisions for small employers

Some of the provisions of the Affordable Care Act, or health care law, apply only to small employers, generally those with fewer than 50 full-time employees, including full-time equivalent employees.

If you have fewer than 50 employees, but are a member of a group with a certain level of common or related ownership with 50 or more full-time employees, including full-time equivalent employees, you are subject to the rules for large employers.

Here are the responsibilities and benefits for small employers under the health care law:

Coverage

You can purchase insurance through the Small Business Health Options Program (SHOP).  Learn more at HealthCare.gov.

Reporting

• You must withhold and report an additional 0.9 percent on employee wages or compensation that exceeds $200,000.
• You may be required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2.
• If you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover. 

Payments and credits

• You may be eligible for the Small Business Health Care Tax Credit if you cover at least 50 percent of your full-time employee's premium costs and you have fewer than 25 full-time equivalent employees.  See the Small Business Health Care Tax Credit Estimator.
• If you self-insure, you may be required to pay a fee to help fund the Patient-centered Outcomes Research Trust Fund.