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Posts Tagged ‘business tax’
Wednesday, September 1st, 2010
What are the Tax Requirements for Barter Exchanges?
Barter exchanges, whether Internet based or with a physical location, are required to file Form 1099-B for all transactions unless certain exceptions are met. Barter exchanges are not required to file Form 1099-B for:
Exchanges through a barter exchange having fewer than 100 transactions during the year
Exempt foreign persons as defined in Regulations section 1.6045-1(g)(1)
Exchanges involving property or services with a fair market value of less than $1.00
For calendar year 2008, Copy B of Form 1099-B is due to barter exchange participants by February 2, 2009. Copy A of the form is required to be filed with the IRS by March 2, 2009. If filing electronically, the due date is March 31, 2009. Software that generates a file according to the specifications in Publication 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically (PDF) must be used by barter exchanges. The IRS does not provide a fill-in form option.
Caution: Paper forms are scanned during processing by the IRS. Forms 1096, 1098, 1099, or 5498 that are printed from IRS.gov will not be accepted.
Non-corporate client or member bartering is reported on a transactional basis on Form 1099-B, but additional information is to be added to the form by the barter exchange. Under Regulation 1.6045-1(f)(i), barter exchanges are required to make a return of information reporting the name, address, and taxpayer identification number of each member or client providing property or services in the exchange, the property or services provided, the amount received by the member or client for such property or services, the date on which the exchange occurred and other information required on Form 1099-B. This means that multiple Forms 1099-B may be required for member clients with multiple bartering transactions during the year. To learn more about 1.6045-a(f)(i), Returns of Information of Broker and Barter Exchanges, visit the Electronic Code of Federal Regulations site, click on “Simple Search” and enter 26 in the Title and “Returns of information of brokers and barter exchanges.” in the “Search for” field.
Corporate client or member bartering is reported on the aggregate for the year, rather than on a transactional basis. Under Regulation 1.6045-1(f)(ii), barter exchanges are required to file annual Forms 1099-B including the aggregate or total amount received by a corporate client or member during the year for property or services provided by the corporate client or member in all barter transactions through the barter exchange. Form 1099-B additionally requires the name, address, and taxpayer identification number of the corporate client or member.
Penalty for Not Filing or Filing Incorrect Forms 1099-B
Failure to file Forms 1099-B can result in significant penalties under Internal Revenue Code Section 6721. The penalty is based on when correct information returns are filed. The penalties are:
$15 per information return if filed correctly within 30 days of the specified due date with a maximum penalty of $75,000 per year ($25,000 for small businesses, defined below).
$30 per information return if filed correctly more than 30 days after the due date, but by August 1 with a maximum penalty of $150,000 per year ($50,000 for small businesses).
$50 per information return if filed after August 1, or not filed, with a maximum penalty of $250,000 per year ($100,000 for small businesses).
A minimum of $100 for each unfiled information return for intentional disregard.
How to Determine if Your Business Qualifies as a Small Business for the Lower Maximum Penalties
If your average annual gross receipts were $5 million or less for the three most recent tax years, or for the period you were in business if shorter, before the calendar year in which the information returns were due, then you are a small business qualified for the lower maximum penalties.
Back-up Withholding and the “B” Process
Back-up withholding can apply to most kinds of payments that are reported on Form 1099, including payments by broker/barter exchanges. Barter exchanges are required to issue “B” notices and are subject to performing back-up withholding if barter participants fail to furnish a valid Taxpayer Identification Number (TIN). For more information please refer to the Back-up Withholding “B” Processes page.
How to Get More Help
If you have questions about reporting on Form 1099-B, call the IRS information reporting customer service site toll free at 1-866-455-7438 or 304-263-8700 (not toll free). For TTY/TDD equipment, call 304-267-3367 (not toll free). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m., Eastern Time.
What are the Tax Requirements for Barter Exchanges?
Barter exchanges, whether Internet based or with a physical location, are required to file Form 1099-B for all transactions unless certain exceptions are met. Barter exchanges are not required to file Form 1099-B for:
- Exchanges through a barter exchange having fewer than 100 transactions during the year
- Exempt foreign persons as defined in Regulations section 1.6045-1(g)(1)
- Exchanges involving property or services with a fair market value of less than $1.00
For calendar year 2008, Copy B of Form 1099-B is due to barter exchange participants by February 2, 2009. Copy A of the form is required to be filed with the IRS by March 2, 2009. If filing electronically, the due date is March 31, 2009. Software that generates a file according to the specifications in Publication 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically (PDF) must be used by barter exchanges. The IRS does not provide a fill-in form option.
Caution: Paper forms are scanned during processing by the IRS. Forms 1096, 1098, 1099, or 5498 that are printed from IRS.gov will not be accepted.
Non-corporate client or member bartering is reported on a transactional basis on Form 1099-B, but additional information is to be added to the form by the barter exchange. Under Regulation 1.6045-1(f)(i), barter exchanges are required to make a return of information reporting the name, address, and taxpayer identification number of each member or client providing property or services in the exchange, the property or services provided, the amount received by the member or client for such property or services, the date on which the exchange occurred and other information required on Form 1099-B. This means that multiple Forms 1099-B may be required for member clients with multiple bartering transactions during the year. To learn more about 1.6045-a(f)(i), Returns of Information of Broker and Barter Exchanges, visit the Electronic Code of Federal Regulations site, click on “Simple Search” and enter 26 in the Title and “Returns of information of brokers and barter exchanges.” in the “Search for” field.
Corporate client or member bartering is reported on the aggregate for the year, rather than on a transactional basis. Under Regulation 1.6045-1(f)(ii), barter exchanges are required to file annual Forms 1099-B including the aggregate or total amount received by a corporate client or member during the year for property or services provided by the corporate client or member in all barter transactions through the barter exchange. Form 1099-B additionally requires the name, address, and taxpayer identification number of the corporate client or member.
Penalty for Not Filing or Filing Incorrect Forms 1099-B
Failure to file Forms 1099-B can result in significant penalties under Internal Revenue Code Section 6721. The penalty is based on when correct information returns are filed. The penalties are:
- $15 per information return if filed correctly within 30 days of the specified due date with a maximum penalty of $75,000 per year ($25,000 for small businesses, defined below).
- $30 per information return if filed correctly more than 30 days after the due date, but by August 1 with a maximum penalty of $150,000 per year ($50,000 for small businesses).
- $50 per information return if filed after August 1, or not filed, with a maximum penalty of $250,000 per year ($100,000 for small businesses).
- A minimum of $100 for each unfiled information return for intentional disregard.
How to Determine if Your Business Qualifies as a Small Business for the Lower Maximum Penalties
If your average annual gross receipts were $5 million or less for the three most recent tax years, or for the period you were in business if shorter, before the calendar year in which the information returns were due, then you are a small business qualified for the lower maximum penalties.
Back-up Withholding and the “B” Process
Back-up withholding can apply to most kinds of payments that are reported on Form 1099, including payments by broker/barter exchanges. Barter exchanges are required to issue “B” notices and are subject to performing back-up withholding if barter participants fail to furnish a valid Taxpayer Identification Number (TIN). For more information please refer to the Back-up Withholding “B” Processes page.
How to Get More Help
If you have questions about reporting on Form 1099-B, call the IRS information reporting customer service site toll free at 1-866-455-7438 or 304-263-8700 (not toll free). For TTY/TDD equipment, call 304-267-3367 (not toll free). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m., Eastern Time.
Tags: Barter Exchanges, business tax, business taxes, Exempt foreign persons, Form 1099-B, Form 1099B, income tax, income taxes, Internal Revenue Code, irs, irs gov, Returns of information of brokers and barter exchanges, Tax, Tax Requirements, Tax Requirements for Barter Exchanges, tax years, taxes, Taxpayer Identification Number, What are the Tax Requirements for Barter Exchanges?, www irs gov
Posted in Uncategorized | 4 Comments »
Sunday, June 6th, 2010
Seasonal Employer Tips for Filing Form 941
Seasonal employers do not have to file a Form 941 for quarters in which they have no tax liability because they have paid no wages. To tell the IRS that you will not file a return for one or more quarters during the year, check the box on line 19 every quarter you file Form 941.
The preprinted label for your Form 941 will not include the date the quarter ended. You must enter that yourself when you file the return. Generally, the IRS will not inquire about unfiled returns if at least one taxable return is filed each year. However, you must check the “Seasonal Employer” box on every Form 941 you file.
Seasonal Employer Tips for Filing Form 941
Seasonal employers do not have to file a Form 941 for quarters in which they have no tax liability because they have paid no wages. To tell the IRS that you will not file a return for one or more quarters during the year, check the box on line 19 every quarter you file Form 941.
The preprinted label for your Form 941 will not include the date the quarter ended. You must enter that yourself when you file the return. Generally, the IRS will not inquire about unfiled returns if at least one taxable return is filed each year. However, you must check the “Seasonal Employer” box on every Form 941 you file.
Tags: business tax, Form 941, irs, IRS.com, Seasonal Employer, Seasonal Employer Tips for Filing Form 941, small business tax, Tax, tax liability, taxable return, taxes
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Saturday, May 15th, 2010
Health Savings Accounts (HSAs)
2010 Changes
Eligibility. For 2010, a qualifying high deductible health plan (HDHP) must have a deductible of at least $1,200 for self-only coverage or $2,400 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $5,950 for self-only coverage and $11,900 for family coverage.
Employer contributions. Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. For 2010, you can contribute up to the following amounts to a qualified individual’s HSA.
$3,050 for self-only coverage or $6,150 for family coverage.
$4,050 for self-only coverage or $7,150 for family coverage for a qualified individual who is age 55 or older at any time during the year. The $7,150 limit is increased by $1,000 for two married individuals who are age 55 or older at any time during the year provided and each spouse has a separate HSA.
Employers are allowed to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee.
Health Savings Accounts (HSAs)
2010 Changes
Eligibility. For 2010, a qualifying high deductible health plan (HDHP) must have a deductible of at least $1,200 for self-only coverage or $2,400 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $5,950 for self-only coverage and $11,900 for family coverage.
Employer contributions. Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. For 2010, you can contribute up to the following amounts to a qualified individual’s HSA.
- $3,050 for self-only coverage or $6,150 for family coverage.
- $4,050 for self-only coverage or $7,150 for family coverage for a qualified individual who is age 55 or older at any time during the year. The $7,150 limit is increased by $1,000 for two married individuals who are age 55 or older at any time during the year provided and each spouse has a separate HSA.
Employers are allowed to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee.
Tags: business tax, business taxes, family coverage, federal income tax withholding, FUTA tax, Health Savings Accounts (HSAs), high deductible health plan (HDHP), highly compensated employee, Medicare tax, nonhighly compensated employee, self-only coverage, small business tax, social security tax, Tax, taxes
Posted in Uncategorized | 3 Comments »
Wednesday, May 12th, 2010
Investment Credit
Generally, the energy credit from the following properties was scheduled to expire after 2008 but has been extended through 2016.
Qualified fuel cell property.
Qualified microturbine property.
Solar energy property.
For tax years beginning after October 3, 2008, the energy credit can offset the alternative minimum tax.
For periods after February 17, 2009, the investment credit includes the qualifying advanced energy project credit.
For periods after 2008, the $4,000 limit on the energy credit for qualified small wind energy is repealed.
You may elect to treat qualified property placed in service as part of a qualified investment credit facility after 2008 as energy property for purposes of the energy credit instead of takingthe renewable electricity production credit.
Investment Credit
Generally, the energy credit from the following properties was scheduled to expire after 2008 but has been extended through 2016.
Qualified fuel cell property.
Qualified microturbine property.
Solar energy property.
For tax years beginning after October 3, 2008, the energy credit can offset the alternative minimum tax.
For periods after February 17, 2009, the investment credit includes the qualifying advanced energy project credit.
For periods after 2008, the $4,000 limit on the energy credit for qualified small wind energy is repealed.
You may elect to treat qualified property placed in service as part of a qualified investment credit facility after 2008 as energy property for purposes of the energy credit instead of taking the renewable electricity production credit.
Tags: advanced energy project credit, alternative minimum tax, business tax, business taxes, credit for qualified small wind energy, energy credit, energy project credit, income tax, income tax preparation, income taxes, Investment Credit, Qualified fuel cell property, Qualified microturbine property, qualified small wind energy, qualifying advanced energy project credit, renewable electricity production credit, small business tax, small wind energy, Solar energy property, Tax, tax preparation, taxes
Posted in Uncategorized | 1 Comment »
Tuesday, May 11th, 2010
Qualified Transportation Fringe Benefits – Bicycle Commuting Reimbursement
2009 Changes
After 2008, qualified transportation fringe benefits include any qualified bicycle commuting reimbursement.
Qualified bicycle commuting reimbursement. For any calendar year, the exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred by the employee during the calendar year.
Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage. These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee’s residence and place of employment.
Exclusion from wages. Generally, the value of transportation benefits that you provide to an employee during 2009 are excluded from the employee’s wages up to the following limits.
For combined commuter highway vehicle transportation and transit passes:
$120 per month for the months of January and February 2009, and
$230 per month for any month beginning after February 2009.
$230 per month for qualified parking.
For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement.
Qualified bicycle commuting month. For any employee, a qualified bicycle commuting month is any month the employee regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment and does not receive transportation in a commuter highway vehicle, any transit pass, or qualified parking benefits.
Generally, qualified transportation fringe benefits are excluded from an employee’s wages even if you provide them under a compensation reduction agreement. However, qualified bicycle commuting reimbursements do not qualify for this exclusion if made under a compensation reduction agreement.
Qualified Transportation Fringe Benefits – Bicycle Commuting Reimbursement
2009 Changes
After 2008, qualified transportation fringe benefits include any qualified bicycle commuting reimbursement.
Qualified bicycle commuting reimbursement. For any calendar year, the exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred by the employee during the calendar year.
Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage. These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee’s residence and place of employment.
Exclusion from wages. Generally, the value of transportation benefits that you provide to an employee during 2009 are excluded from the employee’s wages up to the following limits.
- For combined commuter highway vehicle transportation and transit passes:
- $120 per month for the months of January and February 2009, and
- $230 per month for any month beginning after February 2009.
- $230 per month for qualified parking.
- For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement.
Qualified bicycle commuting month. For any employee, a qualified bicycle commuting month is any month the employee regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment and does not receive transportation in a commuter highway vehicle, any transit pass, or qualified parking benefits.
Generally, qualified transportation fringe benefits are excluded from an employee’s wages even if you provide them under a compensation reduction agreement. However, qualified bicycle commuting reimbursements do not qualify for this exclusion if made under a compensation reduction agreement.
Tags: Bicycle Commuting Reimbursement, business tax, business tax preparation, commuter highway vehicle, compensation reduction agreement, employer reimbursement, income tax, income tax preparation, income taxes, qualified bicycle commuting months, qualified bicycle commuting reimbursement, qualified parking benefits, Qualified Transportation Fringe Benefits, Qualified Transportation Fringe Benefits - Bicycle Commuting Reimbursement, small business tax, small business tax preparation, Tax, tax preparation, taxes, transit pass
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Monday, May 10th, 2010
Many Tax-Exempt Organizations Must File Form 990 by May 17 Deadline to Preserve Tax-Exempt Status with IRS
Audio File for Podcast: Don’t Throw Away Your Tax Exempt Status
IR-2010-59, May 7, 2010
WASHINGTON — A crucial filing deadline of May 17 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked.
The Pension Protection Act of 2006 mandates that all non-profit organizations, other than churches and church related organizations, must file an information form with the IRS. This requirement has been in effect since the beginning of 2007, which made 2009 the third consecutive year under the new law. Any organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
Form 990-series information returns are due on the 15th day of the fifth month after an organization’s fiscal year ends. Many organizations use the calendar year as their fiscal year, which makes May 15 the deadline for those tax-exempt organizations. May 15 falls on a Saturday this year so the deadline this year is actually Monday, May 17. Organizations can request an extension of their filing date by filing Form 8868 by the original due date. Absent a request for extension, there is no grace period from filing by the original due date.
Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N (e-Postcard). This asks for a few basic pieces of information. Tax-exempts with annual receipts above $25,000 must file a Form 990 or 990-EZ, depending on their annual receipts. Private foundations file form 990-PF.
Any tax-exempt organization that has not filed the required form in the last three years automatically will lose its tax exempt status effective as of the due date of the annual filing. Under the law, the IRS does not have discretion in this matter.
A list of revoked organizations will be available to the public on IRS.gov.
If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.
Many Tax-Exempt Organizations Must File Form 990 by May 17 Deadline to Preserve Tax-Exempt Status with IRS
Audio File for Podcast: Don’t Throw Away Your Tax Exempt Status
IR-2010-59, May 7, 2010
WASHINGTON — A crucial filing deadline of May 17 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked.
The Pension Protection Act of 2006 mandates that all non-profit organizations, other than churches and church related organizations, must file an information form with the IRS. This requirement has been in effect since the beginning of 2007, which made 2009 the third consecutive year under the new law. Any organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
Form 990-series information returns are due on the 15th day of the fifth month after an organization’s fiscal year ends. Many organizations use the calendar year as their fiscal year, which makes May 15 the deadline for those tax-exempt organizations. May 15 falls on a Saturday this year so the deadline this year is actually Monday, May 17. Organizations can request an extension of their filing date by filing Form 8868 by the original due date. Absent a request for extension, there is no grace period from filing by the original due date.
Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N (e-Postcard). This asks for a few basic pieces of information. Tax-exempts with annual receipts above $25,000 must file a Form 990 or 990-EZ, depending on their annual receipts. Private foundations file form 990-PF.
Any tax-exempt organization that has not filed the required form in the last three years automatically will lose its tax exempt status effective as of the due date of the annual filing. Under the law, the IRS does not have discretion in this matter.
A list of revoked organizations will be available to the public on IRS.gov.
If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.
Tags: 990-EZ, business tax, business tax return preparation, electronic notice Form 990-N, federal tax exempt status, Form 8868, form 990, Form 990 or 990-EZ, Form 990-N, form 990-PF, Form 990-series, Form 990-series information, Form 990-series information returns, income tax, income tax preparation, income taxes, irs gov, Many Tax-Exempt Organizations Must File Form 990 by May 17 Deadline to Preserve Tax-Exempt Status with IRS, non-profit organizations, Pension Protection Act of 2006, small business tax, small business tax preparation, small tax-exempt organizations, Tax, tax exempt, tax exempt organizations, tax exempt status, tax preparation, taxes, The Pension Protection Act of 2006
Posted in Uncategorized | 1 Comment »
Monday, May 3rd, 2010
Small Business Health Care Tax Credit
The Small Business Health Care Tax Credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees.
Eligibility Rules
Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
Average annual wage. A qualifying employer must pay average annual wages below $50,000.
Both taxable (for profit) and tax-exempt firms qualify.
Amount of Credit
Maximum Amount. The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Small Business Health Care Tax Credit
The Small Business Health Care Tax Credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees.
Eligibility Rules
- Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
- Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
- Average annual wage. A qualifying employer must pay average annual wages below $50,000.
- Both taxable (for profit) and tax-exempt firms qualify.
Amount of Credit
- Maximum Amount. The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
- Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Tags: business tax, business tax preparation, health care coverage, income tax, income tax preparation, income taxes, Small Business Health Care Tax Credit, small business tax, small business tax planning, small business tax preparation, small tax-exempt organizations, Tax, tax preparation, taxes
Posted in Uncategorized | 2 Comments »
Sunday, May 2nd, 2010
Work Opportunity Credit – Unemployed veterans – Disconnected youth
Two new targeted groups have been added to the work opportunity credit:
Unemployed veterans, and
Disconnected youth.
An unemployed veteran is a veteran hired after 2008 and before 2011 who:
Has been discharged or released from active duty in the U.S. Armed Forces at
any time during the 5-year period ending on the hiring date, and
Received unemployment compensation under state or federal law for at least 4
weeks during the 1-year period ending on the hiring date.
A disconnected youth is an individual hired after 2008 and before 2011 who:
Is at least age 16 but not yet age 25 on the hiring date;
During the past 6 months, has not attended or has not regularly attended any
secondary, technical, or post-secondary school for more than an average of 10
hours per week, not counting periods during which the school was closed for
scheduled vacation;
During each consecutive 3-month period within the past 6 months, was not
employed or was employed and earned an amount less than he or she would
have earned working for the applicable minimum wage 30 hours every week
during the 3-month period; and
Does not have a certificate of graduation from a secondary school or a General
Education Development (GED) certificate or has a certificate that was awarded
at least 6 months ago and he or she has not held a job (other than occasionally)
or been admitted to a technical or post-secondary school since receiving the
certificate.
Work Opportunity Credit – Unemployed veterans – Disconnected youth
Two new targeted groups have been added to the work opportunity credit:
- Unemployed veterans, and
- Disconnected youth.
An unemployed veteran is a veteran hired after 2008 and before 2011 who:
- Has been discharged or released from active duty in the U.S. Armed Forces at any time during the 5-year period ending on the hiring date, and
- Received unemployment compensation under state or federal law for at least 4 weeks during the 1-year period ending on the hiring date.
A disconnected youth is an individual hired after 2008 and before 2011 who:
- Is at least age 16 but not yet age 25 on the hiring date;
- During the past 6 months, has not attended or has not regularly attended any secondary, technical, or post-secondary school for more than an average of 10 hours per week, not counting periods during which the school was closed for scheduled vacation;
- During each consecutive 3-month period within the past 6 months, was not employed or was employed and earned an amount less than he or she would have earned working for the applicable minimum wage 30 hours every week during the 3-month period; and
- Does not have a certificate of graduation from a secondary school or a General Education Development (GED) certificate or has a certificate that was awarded at least 6 months ago and he or she has not held a job (other than occasionally) or been admitted to a technical or post-secondary school since receiving the certificate.
Tags: business tax, certificate of graduation, Disconnected youth, General Education Development (GED), income tax, income tax preparer, income taxes, released from active duty, small business tax, Tax, tax preparer, taxes, U.S. Armed Forces, Unemployed veterans, unemployment compensation, Work Opportunity Credit, Work Opportunity Credit - Unemployed veterans - Disconnected youth
Posted in Uncategorized | 2 Comments »
Tuesday, April 27th, 2010
COBRA Subsidy Eligibility Period Extended to May 31
IR-2010-52, April 26, 2010
WASHINGTON — Workers who lose their jobs during April and May may qualify for a 65-percent subsidy on their COBRA health insurance premiums, according to the Internal Revenue Service. The American Recovery and Reinvestment Act established this subsidy to help workers who lost their jobs as a result of the recession maintain their employer sponsored health insurance.
The Continuing Extension Act of 2010, enacted April 15, reinstated the COBRA subsidy, which had expired on March 31. As a result, workers who are involuntarily terminated from employment between Sept. 1, 2008 and May 31, 2010, may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months. In some cases, workers who had their hours reduced and later lose their jobs may also be eligible for the subsidy.
Employers must provide COBRA coverage to eligible individuals who pay 35 percent of the COBRA premium. Employers are reimbursed for the other 65 percent by claiming a credit for the subsidy on their payroll tax returns: Form 941, Employers QUARTERLY Federal Tax Return, Form 944, Employer’s ANNUAL Federal Tax Return, or Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees. Employers must maintain supporting documentation for the claimed credit.
COBRA Subsidy Eligibility Period Extended to May 31
IR-2010-52, April 26, 2010
WASHINGTON — Workers who lose their jobs during April and May may qualify for a 65-percent subsidy on their COBRA health insurance premiums, according to the Internal Revenue Service. The American Recovery and Reinvestment Act established this subsidy to help workers who lost their jobs as a result of the recession maintain their employer sponsored health insurance.
The Continuing Extension Act of 2010, enacted April 15, reinstated the COBRA subsidy, which had expired on March 31. As a result, workers who are involuntarily terminated from employment between Sept. 1, 2008 and May 31, 2010, may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months. In some cases, workers who had their hours reduced and later lose their jobs may also be eligible for the subsidy.
Employers must provide COBRA coverage to eligible individuals who pay 35 percent of the COBRA premium. Employers are reimbursed for the other 65 percent by claiming a credit for the subsidy on their payroll tax returns: Form 941, Employers QUARTERLY Federal Tax Return, Form 944, Employer’s ANNUAL Federal Tax Return, or Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees. Employers must maintain supporting documentation for the claimed credit.
Tags: business tax, business taxes, COBRA, COBRA health insurance, COBRA health insurance premiums, COBRA subsidy, COBRA Subsidy Eligibility Period Extended to May 31, employer sponsored health insurance, Employers QUARTERLY Federal Tax Return, Employer’s ANNUAL Federal Tax Return, Employer’s Annual Federal Tax Return for Agricultural Employees, Form 944, income tax, income tax preparation, income taxes, internal revenue service, or Form 943, payroll tax returns: Form 941, small business tax, small business taxes, Tax, tax preparation, taxes, The American Recovery and Reinvestment Act, The Continuing Extension Act of 2010
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Monday, April 19th, 2010
IRS Reaches Out to Millions of Employers on Benefits of New Health Care Tax Credit
IR-2010-48, April 19, 2010
WASHINGTON ― The Internal Revenue Service this week began mailing postcards to more than four million small businesses and tax-exempt organizations to make them aware of the benefits of the recently-enacted small business health care tax credit.
Included in the Patient Protection and Affordable Care Act approved by Congress last month and signed into law by President Obama, the credit is one of the first health care reform provisions to go into effect. The credit, which takes effect this year, is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
“We want to make sure small employers across the nation realize that — effective this tax year — they may be eligible for a valuable new tax credit. Our postcard mailing — which is targeted at small employers — is intended to get the attention of small employers and encourage them to find out more,” IRS Commissioner Doug Shulman said. “We urge every small employer to take advantage of this credit if they qualify.”
In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and moderate income workers.
For tax-years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. The maximum credit goes to smaller employers — those with 10 or fewer full-time equivalent (FTE) employees — paying annual average wages of $25,000 or less. Because the eligibility rules are based in part on the number of FTEs, not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals. The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more.
Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt organizations, the IRS will provide further information on how to claim the credit.
IRS Reaches Out to Millions of Employers on Benefits of New Health Care Tax Credit
IR-2010-48, April 19, 2010
WASHINGTON ― The Internal Revenue Service this week began mailing postcards to more than four million small businesses and tax-exempt organizations to make them aware of the benefits of the recently-enacted small business health care tax credit.
Included in the Patient Protection and Affordable Care Act approved by Congress last month and signed into law by President Obama, the credit is one of the first health care reform provisions to go into effect. The credit, which takes effect this year, is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
“We want to make sure small employers across the nation realize that — effective this tax year — they may be eligible for a valuable new tax credit. Our postcard mailing — which is targeted at small employers — is intended to get the attention of small employers and encourage them to find out more,” IRS Commissioner Doug Shulman said. “We urge every small employer to take advantage of this credit if they qualify.”
In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and moderate income workers.
For tax-years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. The maximum credit goes to smaller employers — those with 10 or fewer full-time equivalent (FTE) employees — paying annual average wages of $25,000 or less. Because the eligibility rules are based in part on the number of FTEs, not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals. The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more.
Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt organizations, the IRS will provide further information on how to claim the credit.
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