IRS Releases Notice 2016-75 Regarding the Tax Credit for Employee Health Insurance Expenses of Certain Small Employers in Wisconsin

On Dec. 2, 2016, the IRS released Notice 2016-75, which provides an exception allowing certain small employers in specified Wisconsin counties to claim the small business health care tax credit, even though they did not purchase coverage through the Small Business Health Options Program (SHOP). This is because no qualified health plan was available in those counties for all or part of 2016.

The exemption applies to employers whose principal business address is in Pierce, Polk or St. Croix Counties and who purchased group health coverage outside of the SHOP. The coverage must otherwise meet the criteria for claiming the tax credit including:

  • The employer has fewer than 25 full-time equivalent employees;
  • The average annual wage of its employees is less than $51,800 (for 2016); and
  • The employer pays a uniform percentage for all employees equal to at least 50 percent of the premium cost of employee-only coverage.

Finally, the exemption applies to 2016 plan years, including those months in 2017 for non-calendar year plans.

IRS Notice 2016-75 »