Billions of dollars are forfeited every year because business leaders and managers do not have the means to track, research and take advantage of the available government incentives. Our due diligence in tracking employer business incentives is focused on the following key categories:
The Work Opportunity Tax Credit is a federal hiring incentive that provides a tax credit of up to $9,600 per qualified new hire. The qualifications are based on employment/financial status criteria. Programs include new hires who have been on government assistance, veterans, ex-felons and qualified summer youth, to name only a few.
Under IRS regulations, employers in the food and beverage industry may be eligible for a credit for social security and medicare taxes paid on their employees' tip income.
Periodically, the federal government designates certain economically depressed areas as tax advantage areas. If your business is located in one of these areas and you employ individuals living in the same area, you can earn credits against your federal tax liability.
For example, Empowerment Zone (EZ) credits have provided up to $3,000 per qualified employee per year. In addition, the businesses located within the zones are entitled to increased tax expensing of equipment purchases and tax incentives for environmental remediation.
The Renewal Communities (RC) credit provides up to $1,500 per qualified employee per year.
These credits have existed to help businesses rebuild and to help individuals rejoin the work force in the aftermath of events such as Hurricanes Katrina, Rita, Wilma and similar natural disasters. The federal government has joined with state and local governments to insure the rebuilding of infrastructures and physical facilities impacted as a result of the aforementioned disasters.
When a disaster credit is in effect, employers can earn up to $2,400 in tax credits per qualifying new employee.
The Indian Employment Credit provides businesses with tax credits which, unlike tax deductions, directly offset an organization's federal tax burden. This provides an incentive to hire and retain individuals who are enrolled members of an Indian tribe (or the spouse of an enrolled member) who live and work on or near an Indian Reservation.
The Research & Development Tax Credit (R&D) offers tax incentives and expensing of costs for investments, such as research efforts of qualifying companies to develop new or improved products/processes in their businesses. This credit is not just for the more technical companies as it is often thought to be. Regulations of the IRS in December of 2003, which are retroactive, have made it easier to qualify. In addition, many states also offer R&D credits.