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Tax Relief for American Families and Workers Act of 2024

The House of Representatives recently passed House Bill 7024, known as the Tax Relief for American Families and Workers Act of 2024, with significant bipartisan support. This landmark legislation aims to realign America’s tax code to bolster economic growth, support working-class families, and provide certainty for American businesses in a climate of economic recovery and innovation.

Key provisions of H.R. 7024 include an expansion of the child tax credit, significant support for American innovation through expanded Research & Development (R&D) expensing, and enhanced measures to improve the competitive stance of U.S. businesses internationally. Specifically, the bill proposes to:

  • Increase access to housing by providing more flexibility on bond financing requirements and increasing state tax credit allocations.
  • Eliminate the penalty in the child tax credit for families with more than one child, alongside increasing the refund amount and indexing these amounts to inflation starting in 2024.
  • Offer “time-limited and limited in scope” disaster tax relief for communities affected by recent calamities, including hurricanes and wildfires.
  • Ends ERC program early on January 31, 2024, adds penalties for certain COVID-ERC promoters and extends statue of limitations to 6 years.
  • Increases maximum amount for section 179 expensing with a slight raise in expensing limit allowance […]
By |2024-02-06T18:04:34+00:00February 5th, 2024|disaster, tax credit, taxpayer relief act|0 Comments

Does Your Business Have Employees Who Get Tips? You May Qualify for a Tax Credit

If you’re an employer with a business where tipping is routine when providing food and beverages, you may qualify for a federal tax credit involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income.

Credit fundamentals

The FICA credit applies to tips that your staff members receive from customers when they buy food and beverages. It doesn’t matter if the food and beverages are consumed on or off the premises. Although tips are paid by customers, for FICA purposes, they’re treated as if you paid them to your employees.

As you know, your employees are required to report their tips to you. You must:

  • Withhold and remit the employee’s share of FICA taxes, and
  • Pay the employer’s share of those taxes.

How the credit is claimed

You claim the credit as part of the general business credit. It’s equal to the employer’s share of FICA taxes paid on tip income in excess of what’s needed to bring your employee’s wages up to $5.15 per hour. In other words, no credit is available to the extent the tip income just brings the employee up to the $5.15-per-hour level, calculated monthly. If you […]

By |2024-01-12T17:05:38+00:00January 12th, 2024|tax credit|0 Comments

Pocket a Tax Break for Making Energy-Efficient Home Improvements

An estimated 190 million Americans have recently been under heat advisory alerts, according to the National Weather Service. That may have spurred you to think about making your home more energy efficient — and there’s a cool tax break that may apply. Thanks to the Inflation Reduction Act of 2022, you may be able to benefit from an enhanced residential energy tax credit to help defray the cost.

Eligibility rules

If you make eligible energy-efficient improvements to your home on or after January 1, 2023, you may qualify for a tax credit up to $3,200. You can claim the credit for improvements made through 2032.

The credit equals 30% of certain qualified expenses for energy improvements to a home located in the United States, including:

  • Qualified energy-efficient improvements installed during the year,
  • Residential “energy property” expenses, and
  • Home energy audits.

There are limits on the allowable annual credit and on the amount of credit for certain types of expenses.

The maximum credit you can claim each year is:

  • $1,200 for energy property costs and certain energy-efficient home improvements, with limits on doors ($250 per door and $500 total), windows ($600 total) and home energy audits ($150), as […]
By |2023-08-16T19:19:40+00:00August 16th, 2023|energy, tax credit|0 Comments

Child Tax Credit: The Rules Keep Changing But It’s Still Valuable

If you’re a parent, you may be confused about the rules for claiming the Child Tax Credit (CTC). The rules and credit amounts have changed significantly over the last six years. This tax break became more generous in 2018 than it was under prior law — and it became even better in 2021 for eligible parents. Even though the enhancements that were available for 2021 have expired, the CTC is still valuable for parents. Here are the current rules.

For tax years 2022 and 2023, the CTC applies to taxpayers with children under the age of 17 (who meet CTC requirements to be ‘’qualifying children’’). A $500 credit for other dependents is available for dependents other than qualifying children.

CTC amount

The CTC is currently $2,000 for each qualifying child under the age of 17. (For tax years after 2025, the CTC will go down to $1,000 per qualifying child, unless Congress acts to extend the higher amount.)

Refundable portion

The refundable portion of the credit is a maximum $1,400 (adjusted annually for inflation) per qualifying child. The earned income threshold for determining the amount of the refundable portion for these years is $2,500. (With a refundable […]

By |2023-02-15T16:27:49+00:00February 15th, 2023|child, tax credit|0 Comments

Work Opportunity Tax Credit Provides Help To Employers

In today’s tough job market and economy, the Work Opportunity Tax Credit (WOTC) may help employers. Many business owners are hiring and should be aware that the WOTC is available to employers that hire workers from targeted groups who face significant barriers to employment. The credit is worth as much as $2,400 for each eligible employee ($4,800, $5,600 and $9,600 for certain veterans and $9,000 for “long-term family assistance recipients”). It’s generally limited to eligible employees who begin work for the employer before January 1, 2026.

The IRS recently issued some updated information on the pre-screening and certification processes. To satisfy a requirement to pre-screen a job applicant, a pre-screening notice must be completed by the job applicant and the employer on or before the day a job offer is made. This is done by filing Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit.

Which new hires qualify?

An employer is eligible for the credit only for qualified wages paid to members of a targeted group. These groups are:

  1. Qualified members of families receiving assistance under the Temporary Assistance for Needy Families (TANF) program,
  2. Qualified veterans,
  3. Qualified ex-felons,
  4. Designated community residents,
  5. […]

By |2022-09-27T17:18:01+00:00September 27th, 2022|business, employer, tax credit|0 Comments
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