Small Business Health Insurance Credit In Texas
The Small Business Health Care Tax Credit allows qualifying small employers to claim a federal credit of up to 50 percent of health insurance premiums paid for employees in tax year 2025. The credit is designed to make offering health coverage more financially feasible for smaller businesses.
Eligibility requires having fewer than 25 full-time equivalent employees, paying average wages below the inflation-adjusted threshold, and purchasing a qualified health plan through the SHOP marketplace. Texas participates in the federally facilitated SHOP marketplace, so Texas small business owners can access qualifying plans through healthcare.gov.
Texas has no state income tax, so the benefit of this credit flows entirely through the federal return. Texas employers should document all premium contributions carefully and confirm that their chosen plan qualifies under SHOP guidelines, as purchasing coverage outside the marketplace disqualifies the business from claiming the credit.