tax credit - Linkenheimer LLP CPAs & Advisors

California Tax Updates for July 8th

Post 1:

Interest rates set on overdue payroll tax in California. For the period beginning July 1, 2020, through Dec. 31, 2020, the rate will be 5% compounded daily, according to the CA Employment Development Department. The rate is adjusted semiannually.

Post 2:

A California apparel designer loses a tax credit fight in court. CA companies that engage in qualified research and development (R&D) activities may be entitled to a credit on their CA tax returns. In one case, a women’s apparel design company filed for tax refunds for 2008 through 2011, based on claims for R&D credits in those years. The credit related to projects, which the CA Franchise Tax Board (FTB) said didn’t satisfy a requirement known as the experimentation process test. The credits were disallowed. The taxpayer sought a rehearing in the CA Office of Tax Appeals. The Appeals Court agreed with the FTB and upheld the decision to disallow the credit. (Swat-Fame, Inc. 5/20/20) If you […]

By Linkenheimer LLP|2020-09-03T20:02:18+00:00July 8th, 2020|ca, CA tax, california, payments, research credit, tax credit|0 Comments

Do You Have Tax Questions Related To COVID-19? Here Are Some Answers

The coronavirus (COVID-19) pandemic has affected many Americans’ finances. Here are some answers to questions you may have right now.

My employer closed the office and I’m working from home. Can I deduct any of the related expenses?

Unfortunately, no. If you’re an employee who telecommutes, there are strict rules that govern whether you can deduct home office expenses. For 2018–2025 employee home office expenses aren’t deductible. (Starting in 2026, an employee may deduct home office expenses, within limits, if the office is for the convenience of his or her employer and certain requirements are met.)

Be aware that these are the rules for employees. Business owners who work from home may qualify for home office deductions.

My son was laid off from his job and is receiving unemployment benefits. Are they taxable?

Yes. Unemployment compensation is taxable for federal tax purposes. This includes your son’s […]

By Linkenheimer LLP|2020-09-03T20:02:59+00:00May 5th, 2020|business, deduction, deductions, disaster, employer, individuals, ira, irs, New Tax Laws, roth ira, small business, tax credit, tax deductions, tax implications, tax planning|0 Comments

Answers to Questions About the CARES Act Employee Retention Tax Credit

The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 pandemic. The employee retention credit is available to employers, including nonprofit organizations, with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings.

The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis.

IRS issues FAQs

The IRS has now released FAQs about the credit. Here are some highlights.

How is the credit calculated? The credit is 50% of qualifying wages paid up to $10,000 in total. So the maximum credit for an eligible employer for qualified wages paid to any employee is $5,000.

Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Therefore, an employer may be able to claim it for qualified wages paid as early as March 13, 2020. Wages aren’t limited to cash payments, but also include part of the cost of employer-provided health care.

When is the operation of a […]

By Linkenheimer LLP|2020-09-03T20:03:10+00:00April 6th, 2020|business, credit, employer, New Tax Laws, relief, small business, tax credit, tax planning|0 Comments

New Law Provides a Variety of Tax Breaks to Businesses and Employers

While you were celebrating the holidays, you may not have noticed that Congress passed a law with a grab bag of provisions that provide tax relief to businesses and employers. The “Further Consolidated Appropriations Act, 2020” was signed into law on December 20, 2019. It makes many changes to the tax code, including an extension (generally through 2020) of more than 30 provisions that were set to expire or already expired.

Two other laws were passed as part of the law (The Taxpayer Certainty and Disaster Tax Relief Act of 2019 and the Setting Every Community Up for Retirement Enhancement Act).

Here are five highlights.

Long-term part-timers can participate in 401(k)s.

Under current law, employers generally can exclude part-time employees (those who work less than 1,000 hours per year) when providing a 401(k) plan to their employees. A qualified retirement plan can generally delay participation in the plan based on an employee attaining […]

By Linkenheimer LLP|2020-09-03T20:03:21+00:00January 29th, 2020|401k, affordable care act, business, tax, tax credit|0 Comments

New Application Period for a Valuable California Business Tax Credit

Coming up soon is a new application period for a valuable California business tax credit. The CA Governor’s Office of Business and Economic Development has announced that, for fiscal year 2019-2020, a total of $236,808,527 in CA Competes Tax Credits is available. Learn more about applying here: https://bit.ly/2nxiNGc. Applications will be accepted during the following periods: July 29 through August 19, 2019 ($90 million total); January 6 through January 27, 2020 ($75 million total); and March 9 through March 30, 2020 ($71.8 million, plus unallocated amounts from previous periods). This credit is an income or franchise tax credit available to businesses that come, stay or expand in CA. If you have questions or are interested in applying, please contact your Linkenheimer CPA.

By Linkenheimer LLP|2020-09-03T20:03:47+00:00July 22nd, 2019|business, tax credit|0 Comments