Do you operate a business in California? Have you taken advantage of the state’s tax credits offered through the California Competes program? The truth is, this program is showing itself to be very difficult for companies to actually receive benefits from.
Tax Season Stress Relievers –
It’s almost that time of year that we all look forward to, especially accountants buckling down with their survival kits! It goes without saying that money and stress go hand in hand. For that reason it is easy to understand that the tax preparation season can be a stressful time of year for CPAs. It is not uncommon for them to put in 70-80 hours/week during the tax season including sleepless nights, lots of coffee, and weekends at the office. To help reduce some stress for our CPAs this tax season, we have put together a list of tips to help ease the stress and make these coming weeks as painless as possible: Read More
Today, there currently are nearly 3,000 tax credits and incentives programs in the United States, sponsored by federal, state and local governments to drive job creation, employee training, capital investment and new business development. These statutory and negotiated opportunities – including point-of-hire tax credits, to property & sales tax incentives, to utility & infrastructure abatements, to name a few – are available to companies of all sizes, across a broad range of industries.
But a relatively small number of companies, regardless of their size or financial sophistication, are benefiting fully from the tax credit and incentive-related benefits to which they are entitled. Industry estimates suggest that fewer than 25 percent of eligible US businesses participate in Read More
Governor Brown has signed AB 10 which will increase the minimum wage from $8 an hour to $9 an hour on July 1, 2014 and again to $10 an hour starting January 1, 2016.
An unintended consequence of the legislation will be an increase in the amount of Enterprise Zone tax credits qualified employers will be able to claim. Employers may still claim credits for qualified employees hired through December 31, 2013 for up to five years of employment. The credit is calculated as a function of the hourly wage with a limit of 150% of the minimum wage per hour. Currently, the maximum credit an employer can claim is $12 for an hour of qualified work; starting in July of next year that cap will increase to $13.50. Read More
On June 27, 2013, the California State Assembly passed AB 93, which eliminates the current Enterprise Zone (EZ) program, replacing it with a new set of incentives, which will be statewide in application. This change requires businesses to take action now to get the most out of existing credits while also preparing to take advantage of the new credits that will be effective January 1, 2014.
The EZ program was first established in 1986 and has been used to attract business to depressed areas in California and to support new and existing businesses located in depressed areas of the state. The program has allowed qualified businesses to claim hiring credits on qualified employees and sales tax credits on qualified purchases.
Do your clients need help understanding the immediate steps they must take? If your clients (CPAs: review your California clients) are in one of California’s 42 EZs, pay California income tax, and have employees, they are a prime candidate to review the various credits that remain available. These credits and refunds can be reviewed for the last four (4) open tax years. The time to act is now. After December 31, 2013 — your clients will have forfeited up to $50,000 per qualified employee. Read More
Every business can benefit from hiring based tax credits. Here is something that you may not know …
Did you know that you have an opportunity to get an additional refund? Studies show that up to 60% of businesses did not take advantage of the Federal 2010 payroll tax credit called the HIRE Act. Employees that were hired between February 1, 2010, and January 1, 2011 and were unemployed for 60 days prior to hire can qualify for a refund of 6.2% of the employee wage for 2010. The deadline for this refund is January 10th, 2014 in order to receive the refund check. (HIRE Act Example: General contractor hired 32 qualified employees in 2010. They receive a refund for over $94,000.00.)
You are probably aware of Enterprise Zone HR Tax Credits for clients within California. However, recent legislation changed the existing statutes making it more difficult for businesses to take advantage of this program. The changes include changing the “look back” ability to limit businesses to review only 12 months from the employee’s date of hire. Some of the categories for eligibility are being amended as well to create additional hurdles for you. California Enterprise Zone ends December 31, 2013.
Businesses should also keep in mind the WOTC (Work Opportunity Tax Credit) program. Recent legislation expanded the qualifiers for this program to make it much more accessible. This program is very time sensitive. EDD requires new employee paperwork be submitted to them in less than 28 days from each employee’s respective date of hire. Businesses can receive up to $9,600 per qualified employee.
These are just a few instances of hiring based tax credits.