IRS · Official form

Form 8941, Credit for Small Employer Health Insurance Premiums

Form 8941 figures the small business health care tax credit for eligible small employers that pay health insurance premiums for their employees. Fill in the official IRS PDF online and download it when you are done.

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What is 8941?

Form 8941, Credit for Small Employer Health Insurance Premiums, calculates the credit available to small employers that cover a meaningful share of employee health insurance premiums for coverage bought through a SHOP Marketplace. Eligibility generally depends on having a small number of full-time equivalent employees and average annual wages under an inflation-adjusted ceiling.

The credit is worth up to half of the premiums an eligible small business pays, with a smaller maximum for tax-exempt employers, and it phases down as employee count and average wages rise. For tax years beginning after 2013 it can only be claimed for two consecutive years, so timing the claim matters.

Who files 8941?

Small businesses that paid employee health premiums for SHOP Marketplace coverage and meet the size and wage tests
Tax-exempt organizations claiming the smaller refundable version of the credit
Partnerships and S corporations, which file the form and pass the credit through to owners
Employers within their two-consecutive-year window for claiming the credit

How to fill out 8941

Count your full-time equivalent employees and compute average annual wages using the worksheets in the instructions.
Enter the premiums you paid for qualifying SHOP coverage and the state average premium limits that apply.
Work through the phase-out lines that reduce the credit as FTEs and average wages increase.
Figure the final credit, which flows to Form 3800 for most businesses or to Form 990-T for tax-exempt employers.
Download the completed PDF and file it with your return for the year you are claiming the credit.

Quick fill 8941 on this page

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Page 1 28 fields

Name(s) shown on return

Identifying number

Did you pay premiums during your tax year for employee health insurance coverage you provided through a Small Business Health Options

Yes. Enter Marketplace Identifier (if any):

See instructions for an exception that may apply to a partnership, S corporation, cooperative, estate, trust, or tax-exempt entity.

Enter the employer identification number (E I N) used to report employment taxes for individuals included on line 1 below if different from

Also see instructions for information about the credit period limitation.

C. No. Go to line 1.

1. Enter the number of individuals you employed during the tax year who are considered employees for purposes of this credit (total from

2. Enter the number of full-time equivalent employees (F T Es) you had for the tax year (from Worksheet 2, line 3). If you entered 25 or

3. Average annual wages you paid for the tax year (from Worksheet 3, line 3). This amount must be a multiple of $1,000. If you entered

4. Premiums you paid during the tax year for employees included on line 1 for health insurance coverage under a qualifying arrangement

5. Premiums you would have entered on line 4 if the total premium for each employee equaled the average premium for the small group market

6. Enter the smaller of line 4 or line 5.

7. Multiply line 6 by the applicable percentage: Tax-exempt small employers, multiply line 6 by 35% (0.35). All other small employers,

8. If line 2 is 10 or less, enter the amount from line 7. Otherwise, enter the amount from Worksheet 5, line 6.

9. If line 3 is $33,000 or less, enter the amount from line 8. Otherwise, enter the amount from Worksheet 6, line 7.

10. Enter the total amount of any state premium subsidies paid and any state tax credits available to you for premiums included on line 4.

11. Subtract line 10 from line 4. If zero or less, enter 0.

12. Enter the smaller of line 9 or line 11.

13. If line 12 is zero, skip lines 13 and 14 and go to line 15. Otherwise, enter the number of employees included on line 1 for whom you

14. Enter the number of F T Es you would have entered on line 2 if you only included employees included on line 13 (from Worksheet 7, line

15. Credit for small employer health insurance premiums from partnerships, S corporations, cooperatives, estates, and trusts (see

16. Add lines 12 and 15. Cooperatives, estates, and trusts, go to line 17. Tax-exempt small employers, skip lines 17 and 18 and go to line

17. Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions).

18. Cooperatives, estates, and trusts, subtract line 17 from line 16. Stop here and report this amount on Form 3800, Part I I I, line 4h.

19. Enter the amount you paid in 2025 for taxes considered payroll taxes for purposes of this credit. See instructions.

20. Tax-exempt small employers, enter the smaller of line 16 or line 19 here and on Form 990-T, Part I I I, line 6f.

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Frequently asked questions

How big can my business be and still qualify?

The credit targets genuinely small employers: you need fewer than a set number of full-time equivalent employees and average annual wages under an inflation-adjusted amount, with the largest credits going to the smallest, lowest-wage employers. The current instructions have the exact figures.

Can I claim the credit every year?

No. For tax years beginning after 2013, the credit is limited to two consecutive tax years, so it is worth planning which years to claim it in.

Does the coverage have to come from the SHOP Marketplace?

Generally yes for current years. The credit requires coverage purchased through a Small Business Health Options Program Marketplace, with limited exceptions described in the instructions.

Form 8941, Credit for Small Employer Health Insurance Premiums

What is 8941?

Who files 8941?

How to fill out 8941

Quick fill 8941 on this page

Frequently asked questions

Related forms

Form 3800, General Business Credit

Form 990-T, Exempt Organization Business Income Tax Return

Form 1120-S, U.S. Income Tax Return for an S Corporation