What is the employee count threshold under the ACA for employers to receive a tax credit for providing health insurance?

The Affordable Care Act (ACA) provides a tax credit for small businesses that offer health insurance to their employees. This tax credit is particularly aimed at helping businesses with fewer employees. To qualify for the tax credit, the employer must have fewer than 25 full-time equivalent employees.

These small businesses can receive a substantial tax credit, up to 50% of the premiums they pay for employee health insurance, thereby encouraging them to provide such benefits. This threshold is specifically tailored to ensure that the support is directed towards smaller entities that may struggle more than larger corporations to provide health insurance for their workers.

In contrast, the threshold of 50 employees is significant under the ACA, as it is the point at which an employer is classified as applicable under the Employer Shared Responsibility Payment (ESRP). However, in terms of receiving a tax credit for health insurance, the cutoff is indeed set at fewer than 25 employees.