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Posts published in “Tax Credit”

FFCRA Sick & Family Leave is New and Improved

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The Families First Coronavirus Response Act (FFCRA) was the first COVID-19 Act passed by Congress on March 18, 2020. Back then, the belief was that COVID-19 would be a short-lived inconvenience where an employee may need to take a couple weeks off from work, and this Act was to allow them that benefit without cost to the employer. Here we are, a year later, still feeling the effects. The Consolidated Appropriations Act (CAA) 2021, passed on December 27, 2020, extended this federal paid leave until March 31, 2021, and we now find further extension and expansion in the recently-passed American…

Employee Retention Tax Credit – The Little Known Tax Benefit

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If your business was impacted by COVID-19, there is a significant amount of unclaimed money quite possibly waiting for you.  The amount is up to $33,000 PER EMPLOYEE.  But why have you not heard of this? Back when the CARES Act was signed by the President on March 27, 2020, COVID-19 was expected to be short-lived (remember the “15 Days to Slow the Spread” plan?) thus, the benefits were to provide short-term relief.  There were a few different major benefits in that Act, but a business was only able to select one.  This included the Paycheck Protection Program (PPP), the…

Consolidated Appropriations Act, 2021 – Business Benefits

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On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021.  This is an Act that is signed each year, thus the 2021 suffix, and basically includes the federal government’s budget for 2021. It also includes a large section of COVID-19 related benefits for businesses. The following is a summary of what has passed.  It is a bit lengthy of a “summary,” but all good stuff. FFCRA Sick and Family Paid Leave The FFCRA tax credit has been extended through March 31, 2021, although the employer mandate has not been extended.  This means that an employer can decide whether or not…

Families First Coronavirus Response Act Explained

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With the passage of the Families First Coronavirus Response Act, two new refundable payroll tax credits are available to employers with fewer than 500 employees.  These refundable credits are designed to fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.  The Act allows two paid leaves for the employee’s own health needs or the care of family members.  This will enable employers to keep their employees on payroll and ensure that employees are not forced to choose between their paycheck and the public wellbeing.   Emergency Paid Sick Leave                 Companies with fewer than 500 employees,…

Little Known Successor Rule Means Big Tax Savings

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There are tax credits and savings all around us, but if you do not know what to look for or have an experienced tax adviser, you may be missing out.  One rarely known tax savings is the Successor employer rule.  The regulations can be found under IRS Code 31.3121(a)(1)-1(b), and there is a single, small paragraph that makes mention of it in Publication 15 Employer’s Tax Guide, but I will give you the rundown here.   If you have purchased or looking to purchase a business, then this is definitely one you do not want to overlook. Most employer taxes are…

Are You Getting The Credit You Deserve? Here Is a TIP.

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The Credit For Portion Of Employer Social Security Paid With Respect To Employee Cash Tips, or Excess FICA Tax Credit on Tips, for short, to be exact. If you are familiar with this tax credit, then congratulations, you are one of the few (just be sure you are not a victim to the ‘Confusions’ I point out below).  The IRS recently reported that for tax 2012 (yeah, it takes them this long to report), 66,400 taxpayers took advantage of this credit.  This quantity seemed underwhelming to me, so I did some research as to how many businesses were potential candidates. …

New Tax Credit for Employers Offering Paid Leave

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When the Tax Cuts and Jobs Act was signed into law back in December 2017, it included Section 45S to the IRS Code which includes a credit for employers who pay for family and medical leave.  The credit is a percentage of the amount of wages paid to a qualifying employee while on leave for up to 12 weeks per taxable year.  The minimum percentage is 12.5% and is increased by .25% for each percentage point by which the amount paid to a qualifying employee exceeds 50% of the employee’s wages, with a maximum credit of 25% (for employers that…

Hurricane Relief Law for Employers

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This past week, September 29th, President Trump signed into law the Disaster Tax Relief and Airport and Airway Extension Act of 2017.  In addition to allowing early withdrawals and loans from retirement plans, deductions for casualty losses, and other personal tax considerations, there is an employment related tax credit for employers (Sec. 503) for retaining their employees during one of the three recent hurricanes; Harvey, Irma, and Maria. Qualifying businesses with locations in one of the Federal declared disaster areas can claim a tax credit for continuing to pay their employees during the time that the business was inoperable until…

Employing Family – A Potential Tax Savings

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While there are many factors to consider when hiring family members, there may be a few advantages from the payroll tax perspective.  But, only if you are aware and perform the necessary overrides in your payroll system or notify your payroll service provider. Let’s break this down into the types of family relationships as the advantages are different for each. Parent employs Child – If the child is under the age of 18 and works in their parents business, their wages are not subject to Social Security (OASDI) or Medicare taxes  This only if the business is setup a sole proprietorship…

WOTC Transition Relief

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Late last year, Congress passed what is titled the Protecting Americans from Tax Hikes (PATH) Act of 2015.   This past week, the IRS issued Notice 2016-22 which provides guidance and Transition Relief for employers claiming the Work Opportunity Tax Credit (WOTC).  If you are not familiar with the WOTC, it is a tax incentive for employers to hire and retain individuals from specific target groups.  The groups include certain Veterans, Temporary Assistance for Needy Families (TANF) recipients, Food Stamp recipients, Supplemental Security Income (SSI) recipients, Vocational Rehabilitation (VR) Referred Individuals, Ex-Felons, Summer Youth employees, and  effective January 1st, 2016, there is…