Tax Credits Industry Updates Blog

Federal Legislative Update (Tax Extenders)

Great news folks – on Friday, December 12/18/2015 Congress voted to pass the “Protecting Americans from Tax Hikes Act of 2015”. It was immediately signed into law by the President.  Related to this Act are the following tax credits and incentives benefiting you as one of our valued clients:

Federal Work Opportunity Tax Credit – This program was extended through December 31, 2019…a five (5) year extension!  We are excited to finally have more than a year or two to work with.  Additionally, a NEW CATEGORY was added, beginning January 1, 2016 any new hire that has been receiving unemployment benefits for 27 consecutive weeks will be considered part of the “new” Long Term Unemployed category.  Our Clients will already see a question for this new category in the ONLINE screening forms.

ACTIONS: If you’ve been screening new hires throughout 2015, you don’t have to change anything.  If you haven’t, we anticipate that the IRS will issue another notice to allow time to go back and screen any 2015 new hires not previously screened. We will be working to identify any new hires still employed who may have slipped through the cracks during his/her hiring.  We’ll have a few months to go back and have these new hires complete the WOTC questionnaire 

Federal Indian Employment Tax Credit – This credit has been extended for two years through December 31, 2016.  This credit has been very valuable in providing incentives for employing Native Americans working on Native American Reservations.

Federal Empowerment Zone Wage Tax Credit – This credit has been extended for two years through December 31, 2016.

Federal Research Credit – This credit has been made PERMANENT!  Now companies can plan for future R&D costs without any unsurety of the availability of this credit.  ADDITIONALLY, the credits has been expanded as follows:

o   It may now be used to offset AMT for businesses with less than $50 million in gross receipts.; and

o   Certain small start-up businesses will be allowed to use the credit to offset payroll taxes.

We are excited about the passing of this legislation and look forward to continuing to serve you in capturing and maximizing these credits and incentives. Please do not hesitate to contact us if you have any questions, or would like more information about this Act.

Link to Government Document