Sacramento Accountant to Help with Employment Tax Incentives
Get in touch with a Sacramento employment tax incentive accountant at Cook CPA Group if your company needs help claiming business tax incentives. Call now.
Businesses in California have the opportunity to claim employment tax credits if they employ certain employees and pay them a qualified wage in specific areas. When it comes time to claim these employment tax incentives, businesses can use the help of an experienced accountant to ensure that they are getting the maximum amount of benefits. There are both state and federal incentive programs that businesses should be aware of and they can do so with the help of an accountant that understands procedure surrounding tax incentives.
Get in touch with an accountant today if you are a business that qualifies for employment tax incentives. Contact the Sacramento employment tax incentive accountants from Cook CPA Group for assistance with claiming these important credits.
Employment Tax Incentives in Sacramento, CA
Employment tax incentives are meant to encourage businesses to hire certain groups of people. California has a few of its own employment tax incentives and there is a federal employment tax incentive program as well. The two most popular employment tax incentives in California are the California New Employment Credit and the California Competes Tax Credit. The California New Employment Credit encourages hiring and employment in the State of California. Both employers and the employees that they hire must meet certain requirements. To be able to claim this incentive, employers must hire full-time employees that are qualified, receive reservations for those employees, pay wages to those employees in a designated geographic area (also known as a DGA), and report that they are claiming the incentive on their tax return. Businesses that would like to claim the California New Employment Credit must have employees that were hired after the employee’s location was made a part of the designated geographic area, perform more than 50% of their services in the designated geographic area, receive a starting wage that is more than 150% of California’s minimum wage, work full-time (at least 35 hours per week for hourly employees), and meet one of the qualification categories. The qualification categories include having been unemployed for the past 6 months or longer, a veteran, have received the federal Earned Income Credit within the prior tax year, an ex-offender convicted of a felony, or a recipient of county general assistance. The designated geographical area is determined by census tracts identified by the Department of Finance. Employers should note that certain businesses are excluded from claiming the California New Employment Credit; these businesses include retail trade services, theater companies and dinner theaters, food services, casinos and hotels, and drinking venues. The California Competes Credit is intended to incentivize businesses to move to California with the intention of growing and expanding. This tax credit is administered by the governor’s office and is meant to offset California’s state income and franchise taxes. Businesses that have plans for expansion to create jobs in California over the next five years can receive an allocation of tax credits; there are no restrictions on the industry or size of the businesses that are eligible to receive this credit. The process of receiving the California Competes Tax Credit entails four parts. It begins with businesses submitting an online application to the Governor’s Office of Business and Economic Development. Then, businesses are evaluated on their plans to create and retain jobs. If businesses that apply are selected, they will be given the opportunity to negotiate the terms and conditions of their contract.The Work Opportunity Tax Credit for Sacramento Employers
The Work Opportunity Tax Credit is a Federal tax credit that is available for employers that are hiring individuals in targeted groups. Its purpose is to incentivize workplaces to diversify and help American works access good jobs. The targeted groups that are eligible for employers to hire to receive credits through the Work Opportunity Tax Credit include:- Qualified Veterans – Qualified veterans are those that have either been unemployed for a certain amount of time or disabled.
- Ex-felon – Qualified ex-felons are those who, within the past year, have either been convicted of a felony or released from prison for a felony.
- Designated Community Residents – These qualified employees are between the ages of 18 and 40 and reside either within an Empowerment Zone (EZ), an Enterprise community, or a Renewal community. They must live in those areas at the time of hiring and throughout their employment.
- Vocational Rehabilitation Referral – People who have a physical or mental disability and have been referred to employers through a rehabilitative service are known as Vocational Rehabilitation Referrals.
- Summer Youth Employee – Qualified summer youth employees are people who are between the ages of 16 and 18 and reside in an Empowerment Zone, enterprise community, or renewal community.
- Supplemental Nutrition Assistance Program (SNAP) Recipients – Employees that are between the ages of 18 and 40 and who are a member of a family that has received SNAP benefits for a certain amount of time qualify their employers for the Work Opportunity Tax Credit.
- Supplemental Security Income (SSI) Recipients – A qualified SSI recipient is someone who has received SSI benefits within 60 days of being hired.
- Long-Term Family Assistance Recipient – Employers can qualify for the Work Opportunity Tax Credit if they hire people who have received assistance through an IV-A program for a certain period of time.
- Qualified Long-Term Unemployment Recipient – Qualified Long-Term Unemployment Recipients are employees who have been unemployed for more than 27 consecutive weeks when they are hired and who have received unemployment compensation during that period.