Employer Tax Credits
Veterans Tax Credit Bill
On November 21, 2011, the President signed into law the VOW to Hire Heroes Act of 2011. This new law provides an expanded work opportunity tax credit to businesses that hire eligible unemployed veterans and for the first time also makes part of the credit available to tax-exempt organizations. Businesses claim the credit as part of the general business credit and tax-exempt organizations claim it against their payroll tax liability. The credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2013.
The VOW to Hire Heroes Act will provide tax credits of up to $2,400 for employers who hire veterans who have been unemployed at least 4 weeks; up to $5,600 for hiring veterans who have been unemployed longer than 6 months; and up to $9,600 for businesses that hire veterans who have service-connected disabilities and have been unemployed longer than 6 months.
For detailed information, please click Here.
New Hire Retention Credit
Employers who hired unemployed workers after Feb. 3, 2010, and before Jan. 1, 2011 and qualified for the New Hire Act Social Security tax exemption may qualify to claim a New Hire Retention Credit of up to $1,000 per worker on their income tax return. For each qualified employee retained for at least 52 consecutive weeks, businesses may be eligible for a general business tax credit of 6.2 percent of wages paid to the qualified employee over the 52 week period, up to a maximum credit of $1,000.
To learn more and see if your business qualifies, click Here.
Small Employer Health Insurance Credit
This is a simple reminder about the health insurance credit available to small employers that started in 2010 and goes through 2013. The Health Reform legislation provides a new tax credit for small employers that purchase health insurance for their employees.
Eligibility Rules
- Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
- Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
- Average annual wage. qualifying employer must pay average annual wages below $50,000.
- Both taxable (for profit) and tax-exempt firms qualify.
Amount of Credit
- Maximun Amount. The credit is worth up to 35 percent of a small business' premium costs. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
- Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Click here for details and a worksheet to see if you qualify.
