Michael Korengold | TaxConnections

12 Nov 2019

Important Things To Know About Tax Credits

With the tax filing season quickly approaching, the Internal Revenue Service recommends taxpayers take time now to determine if they are eligible for important tax credits.

This is the second in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS recently updated its Get Ready page with steps to take now for the 2020 filing season.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a refundable federal income tax credit for working people with low to moderate incomes who meet certain eligibility requirements. Because it’s a refundable credit, those who qualify and claim EITC pay less federal tax, pay no tax or may even get a tax refund. EITC can mean a credit of up to $6,557 for working families with three or more qualifying children. Workers without a qualifying child may be eligible for a credit up to $529.

To get the credit, people must have earned income and file a federal tax return — even if they don’t owe any tax or aren’t otherwise required to file.

Written by IRS | Posted in IRS Notice • Tax Credits

02 Oct 2019

How Does The Solar Tax Credit Program Work?

Michael Korengold Solar Tax Credit Program

How Does The Solar Tax Credit Program Work?

The Solar Tax Credit program, like other federally-sponsored tax credit programs, is a government sponsored initiative designed to encourage taxpayers to help finance solar projects.
Tax credits provide a dollar-for-dollar reduction of a taxpayer’s income tax liability by repurposing tax payment reserves into qualifying tax credit projects.
By investing in a qualified project, the tax credit investor receives tax credits, project cash flows and an exit payment
Tax credit investors take primarily program compliance risk (as opposed to underlying performance risk) and generate a return on the funds they otherwise would have used to satisfy their tax liabilities.

Written by Michael Korengold | Posted in Solar Tax Credit Program

18 Sep 2019

Lowering A Corporation’s Effective Tax Rate With Tax Credits

Corporate Tax Directors are in a unique position to add immense value by exploring ways to lower their corporation’s effective tax rate. Tax Directors must walk a fine line of getting this important mission accomplished or being too creative in taking unnecessary risks.

Insured Tax Credit Investments provide a practical option to lower a corporation’s effective tax rate with the downside covered by insurance.

How do Tax Credits work?

Tax credit programs are government sponsored initiatives designed to encourage taxpayers to help finance solar projects, historic building redevelopment and affordable housing
Corporate taxpayer repurposes tax payment reserves into qualifying tax credit projects
Taxpayer receives tax credits, project cash flows and an exit payment
Tax credit investors generate a return on their tax payments, thus boosting their after-tax income and lowering their effective tax rate
Returns are predominantly uncorrelated with project performance – taxpayers earn the tax credits as long as the project maintains regulatory compliance.
An insurance policy eliminates the compliance risk and, as such, allows a taxpayer to generate a yield on their tax payments without the risk of losing the tax credits