Health care premium credit

[David]

Restaurant business client has several locations and the company pays health care premiums only for the managers at each location. Wait staff, cooks, and others are not provided health insurance coverage.

Does the business qualify for the credit or does the business have to offer health care benefits to all employees in order to qualify for the credit?

Thanks.

[kcjenkins]

From the instructions for Form 8941

In general, all employees who perform services for you during the tax year are taken into account in determining your FTEs, average annual wages, and premiums paid. Rules that apply to certain types of employees are discussed below.

Excluded employees. The following individuals are not considered employees when you figure this credit. Hours and wages of these employees and premiums paid for them are not counted when you figure your credit.

• 
  The owner of a sole proprietorship.
  
• 
  A partner in a partnership.
  
• 
  A shareholder who owns (after applying the section 318 constructive ownership rules) more than 2% of an S corporation.
  
• 
  A shareholder who owns (after applying the section 318 constructive ownership rules) more than 5% of the outstanding stock or stock possessing more than 5% of the total combined voting power of all stock of a corporation that is not an S corporation.
  
• 
  A person who owns more than 5% of the capital or profits interest in any other business that is not a corporation.
  
• 
  Family members or a member of the household who is not a family member but qualifies as a dependent on the individual income tax return of a person listed above. Family members include a child (or descendant of a child), a sibling or step sibling, a parent (or ancestor of a parent), a step-parent, a niece or nephew, an aunt or uncle, or a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. A spouse is also considered a family member for this purpose.
  

Leased employees. Do not use premiums paid by the leasing organization to figure your credit. Also, a leased employee who is not a common law employee is considered an employee for credit purposes if he or she does all the following.

• 
  Provides services to you under an agreement between you and a leasing organization.
  
• 
  Has performed services for you (or for you and a related person) substantially full time for at least 1 year.
  
• 
  Performs services under your primary direction or control.
  

But do not use hours, wages, or premiums paid with respect to the initial year of service on which leased employee status is based.

Seasonal employees.

Seasonal employees who work for you 120 or fewer days during the tax year are not considered employees in determining FTEs and average annual wages. But premiums paid on their behalf are counted in determining the amount of the credit. Seasonal workers include retail workers employed exclusively during holiday seasons.