Idaho Life Producer Practice Exam

Employers with up to 25 full-time equivalent employees earning less than $50,000 may be eligible for a tax credit of what percentage of premiums?

1. 25%

2. 30%

3. 50%

4. 75%

The correct answer is: 50%

The correct answer is that employers with up to 25 full-time equivalent employees earning less than $50,000 may be eligible for a tax credit of 50% of premiums. This tax credit is part of initiatives aimed at encouraging small employers to provide health insurance to their employees. The percentage reflects the government's effort to alleviate some of the financial burdens that small businesses face when offering health insurance coverage. This 50% tax credit can be significant for small employers as it reduces the overall cost of providing health benefits, making it more feasible for them to offer competitive compensation packages to attract and retain employees. The options presented in this question illustrate common percentages used in various tax credit scenarios, but only the 50% amount correlates to the rules governing tax credits for small employers in the healthcare context. The emphasis on employers with a specific number of employees and a cap on their earnings is designed to target support towards smaller organizations rather than larger corporations.