Federal Work Opportunity Credit for 2012:
For 2012, the Federal work opportunity credit applies to veterans. If your company hires a veteran who has been unemployed at least four weeks, you may be eligible for a tax credit of up to $2,400. Higher credits are available for hiring veterans with service-connected disabilities or those who have been unemployed at least six months.
Use Form 8850 to screen job applicants for eligibility and to report eligible new employees to the State workforce agency. You must report eligible new employees to the State workforce agency within 28 days of the date the new employee begins working.
State of Connecticut Job Expansion Tax Credit (JET):
Effective January 1, 2012, a new job expansion tax credit program replaces the three existing Connecticut tax credit programs designed to encourage new hiring. This new credit provides:
- $500 per month credit for each new employee
- $900 per month credit for the following new employees:
- A veteran who at the time of hire: 1) is a member of the armed forces or 2) was honorably discharged from or released under honorable conditions from active service
- A person receiving unemployment benefits or who has not had full-time employment since exhausting his or her unemployment benefits
- A person receiving vocational rehabilitation services from the Bureau of Rehabilitation Services
To qualify, businesses with fewer than 50 employees must hire at least one new full-time employee, businesses with 50 to 100 employees must hire at least five new full-time employees, and businesses with over 100 employees must hire at least ten new full-time employees.
A new job must require at least 35 hours per week for at least 48 weeks per calendar year. If the employee is receiving vocational rehabilitation services, unemployment compensation or has not had full-time employment since exhausting his or her unemployment benefits, the new job must require 20 hours per week for at least 48 weeks per calendar year.
The credit is claimed in the income year in which it is earned and can also be claimed in the two immediate succeeding income years if eligible. If a company is an S Corporation or a partnership, the shareholders or partners may claim the credit. If a company is a single-member limited liability company (LLC) that is disregarded as an entity separate from its owner, the LLC’s owner may claim the credit.
IRS Form 1099:
New for 2011 income tax returns (Forms 1120, 1120S, 1065 or 1040 Schedules C, E and F), businesses will be required to answer the following questions:
- Did you make any payments that would require you to file Form(s) 1099?, and
- If Yes, did you or will you file all required Forms 1099?
Forms 1099 are due to recipients on January 31, 2012. There are no changes in the reporting requirements, but the IRS is becoming more serious about businesses completing these forms. Penalties for failing to file 1099 forms can be significant.
Please contact our office if you feel that you may need to file these forms, and we can discuss the reporting requirements with you.
BHCO Portal:
Our firm has recently established a portal system for business and individual clients to securely exchange confidential financial documents and tax returns with us. With this system, we can share large files such as QuickBooks backups and sensitive documents (such as salary or wage information and copies of tax returns, etc.), all in a simple and secure manner. The portal saves paper and time and is always available to you whenever you want to access it.
Please call our portal administrator, Laura Thompson at 203-787-6527, if you would like to make use of this system so that we can get your portal set up.
Details on how to operate the system will be sent to you once your portal is in operation.
If you would like to discuss the impact of these rules, please feel free to call us at 203-787-6527 or contact us through our website at www.bhco.com.