There is Still Time for Your Business to Take Advantage of the HIRE Act!

There is still time for your business to take advantage of the tax credits available for hiring unemployed workers.  The tax credits are available in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act.

There are 2  tax benefits are now available to employers hiring workers who were previously unemployed or only working part-time:

1. Employers who hire unemployed workers this year (by 12/31/10) may qualify for a 6.2-percent payroll tax incentive. This hiring incentive effectively exempts the employers from their share of Social Security taxes on wages paid to the hired employees for 2010. Employers would still need to withhold the employee’s 6.2-percent share of Social Security taxes, as well as employer and employee’s shares of Medicare taxes and withholding for income taxes.


2. In addition, for each worker retained for at least a year, businesses can claim an extra general business tax credit, up to $1,000 per employee, when the company files its 2011 income tax returns.

See the following IRS article for more guidance: http://www.irs.gov/newsroom/article/0,,id=220326,00.html

IRS delays reporting requirements for Group Health Care Coverage for Businesses

Under the recently passed Affordable Care Act of 2010, businesses should have started reporting group health care coverage in 2011. The Act requires businesses to report the value of employer-sponsored health coverage, by indicating the cost of the health insurance coverage they provide employees on each employee's annual Form W-2.  However, IRS has decided to delay such reporting requirements.

The IRS determined that interim relief was needed to to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with this requirement. So, the IRS will defer the reporting requirement for 2011, making that reporting by employers optional in 2011. The interim relief from the IRS does not require companies to file the reports until 2012.

See IRS guidance: http://www.irs.gov/pub/irs-drop/n-2010-69.pdf http://www.irs.gov/newsroom/article/0,,id=220809,00.html

Is Your Business Eligible for the Small Business Health Care Tax Credit?

As part of the health care package recently passed by Congress, a credit is given to small businesses for certain payments of employee healthcare coverage for low to moderate income workers. This credit will help small businesses offer employer-sponsored health coverage by making the cost of covering their employees more affordable. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees. The credit can be applied to new health insurance coverage or it can help the small business owner maintain the coverage they already offer.

Here are the “Fast Facts” for the Health Care Tax Credit:

Credit Amount: Starting in 2010, the (small business) healthcare tax credit is worth up to 35% of your business' health care premium costs.

▸ The maximum rate (i.e., up to 35%) applies for 2011 through 2013 as well.

▸ On January 1, 2014, your credit increases to 50%.

Eligibility:

If you can answer yes to these 3 requirements, your business may be eligible to claim the small business health tax credit:

1.   Number of Employees: You are a “small business” for the purposes of this tax credit if your businesses has less than 25 full-time workers.

▸ There is a progressive reduction (or phase out) of the credit after 10  full-time employees.

2.  Wages: The average wage or salary paid to your employees is less than $50,000 per year.

▸ The credit phases out gradually for enterprises with average wages between $25,000 and $50,000.

▸ Even if you have employees who earn more than $50,000 per year, you may still qualify for the credit for those who fall below this cut-off.

3.  Coverage Payments: You pay at least 50% of the employee’s single coverage rate (i.e., coverage for the employee-only).

To determine if your business is eligible, use the IRS worksheet (“Three Simple Steps”): http://www.irs.gov/pub/irs-utl/3_simple_steps.pdf

Reporting: Businesses will use new Form 8941 to calculate and report the small business health care tax credit.

▸ A draft of the form is available (http://www.irs.gov/pub/irs-dft/f8941--dft.pdf)

▸ A final Form 8941 be available later this year.

For more information see the IRS website on this credit go to: http://www.irs.gov/newsroom/article/0,,id=223666,00.html

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The attorneys at the Chicago business law firm of Griffith & Jacobson, LLC can help your business with this tax credit.

For information on how our business lawyers can help you, contact Arieh M. Flemenbaum at 312-236-8110 or info@gjlaw.com .

Visit our website at http://www.gjlaw.com.

Griffith & Jacobson, LLC – Chicago’s Business Lawyers.

Illinois passes Tax Credits to Boost Tech Investment

The Illinois General Assembly has passed a bill that should increase investment in emerging technologies and bring jobs to  Illinois. The bill sets aside $10 million in tax credits to assist Illinois-based investors in startup companies that commercialize new technologies. A tax credit against state taxes can be provided to investors funding Illinois-based technology firms. The tax credit is capped at 25 percent.

In our post on 5/11/10 we supported the revival of Senate Bill 1522 (go to: Bring Jobs to Illinois – Revive the Emerging Technology Bill). A pared-down version of  SB1522  was resurrected and incorporated into the bill that was approved last week. The angel tax credit now awaits Governor Quinn's signature. The Governor is expected to sign the bill into law, which should occur by this November. Assuming the bill becomes law, the credits could be effective starting next year.

Small, innovative tech-related companies are central to global competitiveness and job creation.  Illinois has been a major hub for tech-related companies, as evidenced last month by the tremendous turnout at the 2010 BIO International Convention (considered the global event for biotechnology) hosted in Chicago. The event closed with a record number of attendees (15,322 industry leaders from 49 states and 65 countries) - to read more on the 2010 BIO International Convention go to: http://convention.bio.org/content.aspx?id=3012.

The bill's passage will enhance Illinois' ability to attract more companies by positioning Illinois as "friendly" to tech-related companies. However, to remain competitive and attract more tech-related companies to Illinois, more has to be done.  Illinois has lagged behind several other Midwestern states in providing tax incentives and grant programs for technology startups. Several neighboring states already offer similar tax credits to investors in tech-related startups, and two such states (Wisconsin and Minnesota) are poised to enhance their tax credit programs.  So, we must continue to pressure the legislature to enhance the tax credit program and add additional incentives and supportive programs.

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For information on how the business lawyers at Griffith & Jacobson, LLC can help your business grow, contact Arieh M. Flemenbaum at 312-236-8110 or by email at Contact Us (http://www.gjlaw.com/CM/Custom/Contact.asp).

Griffith & Jacobson, LLC –  Chicago’s Business Lawyers.

Last minute tax filing tips

With the income tax filing deadline looming, here are 10last minute filing tips from the IRS: http://tinyurl.com/dk6ygd

Or if you need an extension, read these tips from the IRS: http://tinyurl.com/9g55.

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For more information please contact Arieh M. Flemenbaum (312-236-8110 or at amf@gjlaw.com) at Griffith & Jacobson, LLC.

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Check us out at www.GJlaw.com