The New 2011 IRS Tax Calendar for Small Business and Self Employed is available in both English and Spanish (Publication 1518SP), and is filled with useful information to address your business concerns. Each month highlights a different tax topic. Tax reminders and instructions are shown by date, and you can add your own notes such as state tax dates or business appointments. In addition to the monthly topics, you’ll find online resources along with a list of Forms and Publications, and a tear-out sheet of quick reference items.
Find the online version at:
Here are a few of the highlights contained in the new tax calendar:
Hiring Incentives to Restore Employment (HIRE) Act
Two new tax benefits are now available to employers hiring individuals who were previously unemployed or only working part time. These provisions are part of the Hiring Incentives to Restore Employment (HIRE) Act enacted into law on March 18, 2010.
Payroll Tax Exemption for Hiring the Unemployed:
The payroll tax exemption provides employers with an exemption from their 6.2 percent share of social security tax on wages paid to qualifying employees. This provision is effective for wages paid from March 19, 2010 through December 31, 2010.
Business Credit for Retention of Certain Newly Hired Individuals in 2010:
This is a general business credit to encourage retention of new hires. The employer may claim the credit for each qualified employee who remains an employee for 52 consecutive weeks, provided that the employee’s pay does not decrease significantly in the second half of the year. The amount of the credit is the lesser of $1,000 or 6.2 percent of wages (as defined for income tax withholding purposes) paid by the employer to the retained qualified employee during the 52 consecutive week period. The credit cannot be carried back but may be carried forward.
Go to www.irs.gov, search: HIRE Act.
Health Care Tax Credit
Health coverage legislation enacted this year includes a Small Business Health Care Tax Credit to help small businesses and small tax-exempt organizations provide health insurance coverage to their employees. Small businesses and tax-exempt organizations providing health insurance coverage will qualify for a special tax credit.
Included in the health care reform legislation, the Patient Protection and Affordable Care Act encourages small business employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small business employers paying at least half the cost of single coverage for their employees.
Go to www.irs.gov, search: Health Care Tax Credit.
The American Recovery and Reinvestment Act (ARRA) of 2009 contains several tax provisions that affect businesses including the following.
The Recovery Act outlines changes to the health benefit provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985. The provision affects former employees and other potential COBRA payers such as insurance carriers.
ARRA provides a 65 percent subsidy for up to 15 months of the cost of COBRA coverage for an employee who was involuntarily terminated from his/her job from September 1, 2008, through May 31, 2010. The former employee must have been enrolled in an employer provided health plan at the time of involuntary termination to qualify for the credit.
The eligible former employee must pay 35 percent of the total premium and the former employer claims the remaining 65 percent of the total premium as a credit on Line 12a of Form 941, Employer’s Quarterly Federal Tax Return. The credit was first available with the first quarter Form 941 due April 30, 2009. The credit is subject to verification requirements, so the former employer must keep adequate documentation to support the credit claimed.
The COBRA subsidy is available to people who become eligible for COBRA coverage as a result of a reduction in hours occurring between September 1, 2008, and May 31, 2010, followed by an involuntary termination between March 2, 2010 and May 31, 2010. Individuals who did not take COBRA coverage after the reduction in hours or who signed up but later dropped it, get another chance to sign up for COBRA coverage.
Go to www.irs.gov, search: COBRA.
Earned Income Tax Credit
Help your employees increase their take-home pay at no cost to you!
Please help the IRS alert your employees about a valuable tax credit that could put up to $5,600 in their pockets. If you have employees who earned less than $48,000 in 2010, they may qualify for the Earned Income Tax Credit, or EITC. However, IRS estimates that up to one in four qualifying individuals will fail to claim and receive the credit. With your assistance, we can reduce that number.
However, before taxpayers can receive EITC, they must first file federal income tax returns, even if they are not otherwise required to file. Some states have a similar tax credit, increasing the dollars due these employees.
IRS has several resources to help you inform your employees about EITC. Go to the EITC employer page for links to technical information, communication toolkits and marketing materials. Corporate Voices, a leading nonprofit nonpartisan organization that represents the private sector on working family policy issues, also publishes a downloadable employer EITC guide which you can access by clicking here.
Some relatively inexpensive ways you can alert your employees about EITC include:
- Posters in employee break rooms
- Messages on your company intranet site
- Articles in your company newsletter
- A link from your intranet site to EITC information on www.irs.gov
- E-mail messages to your workforce
- Stuffers with your Form W-2 mail-out
- Leveraging other internal communication channels
- Including EITC information in new employee orientations
Article Provided By:
The PCS Team
Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.