What Are Tax Credits?
Tax credits are a direct reduction in the income, payroll, or indirect tax obligations that are owed to Federal, state or local taxing authorities. Typically they are not tax deductions, but a pure dollar for dollar reduction in the amount of income tax owed to tax authorities.
How Can Proliant Help?
Proper calculation and utilization of tax credits reduces the tax obligations of many businesses, putting more money in their pockets. We remove the administrative burden on the employer by handling the following:
- Identify the eligible credits
- Obtain information to apply for the credits
- Complete the numerous forms required to apply for the credits
- Follow-up with the appropriate government agencies for certification
- Calculate the credit for the company’s tax return
What Are Some of The Most Common Credits?
- Work Opportunity Tax Credit
- Federal and State Empowerment Zone Credits
- Renewal Employment Credits
- Federal Indian Employment Credits
- State Point of Hire Credits
- State Training and Retraining Credits
Work Opportunity Tax Credit
The Work Opportunity Tax Credit is a federal credit that is designed to encourage employers to hire new employees from “targeted groups”. The tax credit amount ranged from $2,400 to $9,000 per qualified employee, depending on the category of the employee. Listed below are some of the “targeted groups”:
- Food stamp recipients ages 18 – 39
- Aid to Families with Dependent Children recipient
- Veterans receiving food stamps
- Qualified ex-felon, pardoned, paroled or work released
- Vocational rehabilitation referrals
- Qualified Supplemental Security Income (SSI) recipients