Tax Credits

Which tax programs do we administer…
The credits can add up quickly when each qualified employee wages qualifies for thousands of dollars per year. Below are just a few of the income tax programs that we administer. You may qualify for one or more of the following.

• Work Opportunity Tax Credit (WOTC) (up to $2,400 per employee for most qualified individuals, $4,800 for disabled veterans, $9,000 per qualified long-term family assistance recipient, and $9,600 for a long-term unemployed disabled veteran)
• Federal Empowerment Zone (up to $3,000 per qualified employee per year)
• Renewal Community (up to $1,500 per qualified employee per year)

How our services can impact your bottom line…
The confusing nature of income tax credit programs often prevents businesses from taking advantage of these valuable incentives. However, choosing the right vendor to administer these programs for you can directly improve your bottom line. How so? If your company qualifies for $50,000 in income tax credits, you can apply some or all of that credit to offset your personal or corporate income tax liability. You’ve just increased your income for the year.

The use of these credits can vary according to the type of company. C corporations can use the credits to directly reduce their corporate federal tax liability. Credits pass through to be used by shareholders of Sub S corporations and LLC organizations to reduce personal tax liability.

Most of the geographic income tax programs are retroactive. We can go back and reclaim years of refunds/credits that your company has missed. The credits you obtain can also be carried forward for future use, up to 20 years in fact.

Common misconceptions…

• Most of the accounting firms we encounter do NOT offer this service. They do not conduct the administrative functions required to obtain income tax credits. Don’t assume that your accountant is administering these income tax credit programs. Be sure to ask. You could be losing money.
• You do not have to work on a government contract or location to qualify. These programs have nothing to do with government projects. Most companies assume that they don’t qualify. Actually, the majority of businesses we speak with qualify for at least one of the income tax programs created by Congress.

We want to help you obtain tax credits by staying abreast of the ever changing tax law requirements. You don’t have to pay anything until you know the exact dollar amount of your credits. There are no set-up fees or any charges to qualify your company and its locations. Once we have conducted the necessary research and calculated your credits, your fee is equal to 20% of any credits we obtain for you. It’s that simple.

The Empowerment Zone Employment Credit is an incentive program established in 1994 to revitialize select economically distressed communities across the country.  Businesses that are located in an empowerment zone (EZ) and hire and retain employees who also live in the EZ are eligible for a wage credit of up to $3,000 per eligible employee.

Both full time and part time employees may qualify, as long as they work at least 90 days during the year in which the credit is claimed. The FEZ credit amount is 20% of the first $15,000 of wages paid to the employee ($3,000 max).

The credit is renewable each year, and there is no limit to the number of employees a business can claim, as long as each employee lives in the EZ. Both newly hired and current employees are eligible.  In addition, credits are retrocactive for 3 years, so that credits up to $9,000 per qualified employee may be realized immediately.

Qualifying wages do not include any wages used in applying for either the Work Opportunity Tax Credit or the Welfare-to-Work Tax Credit. Also, the $15,000 maximum qualified wages for the Empowerment Zone Employment Credit will be reduced by any wages used to figure other tax credits for an employee.

To determin which employees meet the geographic requiredments, use the HUD EZ Address Locator on the US Department of Housing and Urban Development (HUD) website.

Rural designations effective December 21, 1994

• Boston, MA
• Cincinnati, OH
• Columbia/Sumter, SC
• Columbus, OH
• Cumberland County, NJ
• El Paso, TX
• Gary/East Chicago, IN
• Huntington, WV/Ironton, OH
• Knoxville/Knox County, TN
• Miami/Miami-Dade County, FL
• Minneapolis, MN
• New Haven, CT
• Norfolk/Portsmouth, VA
• Santa Ana, CA
• St. Louis, MO/East St. Louis, IL

*Rural designations effective December 31, 1998

 Rural Designations effective January 1, 2002

• Northern Maine Development Commission, Inc. (Aroostook County)
• Middle Rio Grande FUTURO Communities in Texas

 Rural Designations effective January 1, 2002

• Northern Maine Development Commission, Inc. (Aroostook County)
• Middle Rio Grande FUTURO Communities in Texas

* Note: For the December 31, 1998 designations only, the FEX wage credit cannot be claimed before 2002, but wages can be claimed after December 31, 2001