Small Business Tax Incentives
Wednesday, June 2nd, 2010
Recent legislation provides incentives for businesses to hire unemployed workers and provide health insurance.
If your company hires a worker after February 3, 2010 through year-end, the HIRE Act allows a credit equivalent to the employer’s share of Social Security tax (6.2%). If the employee stays with you for a year, your company gets a $1,000 tax credit. The new hire must not have worked more than forty hours in the prior sixty days, and generally must be hired into a new position. There are important details and procedures, and a new Form W-11 for the new worker to fill out.
Some provisions of the Affordable Care Act (healthcare reform) take effect this year. The small business health care credit is generally available to small employers that pay at least half the cost of single coverage for their employees in 2010. There are complicated rules regarding such definitions as full-time equivalents and compensation-based phase-out ranges. But if you offer health insurance coverage to your employees, the tax savings could be significant. For more information, read the IRS release. Then find out what you need to do to qualify for the credits.