3 Tax Incentives That Can Help Your Business in 2012
Michele Petersen - Wednesday, June 06, 2012
1. Shasta Metro Enterprise Zone
It Pays to be in the Shasta-Metro Enterprise Zone
California’s Enterprise Zone Program targets economically distressed areas throughout the state. Special incentives encourage business investment and promote the creation of new jobs. This credit is retroactive meaning you can go back and recapture on hires from previous tax years. The purpose of the program is to provide tax incentives to businesses and allow private sector market forces to revive the local economy. The Shasta Metro Enterprise Zone was designated effective from November 6, 2006 to November 5, 2021. For additional forms and assistance see ShastaZone.com or call 530-224-4920
2. New Hire Retention Credit
This tax credit encourages the retention of new hires (retained workers). The employer may claim the credit for each retained worker. A retained worker is a qualified employee (as defined for purposes of the payroll tax exemption) who remains an employee for at least 52 consecutive weeks, and whose wages (as defined for income tax withholding purposes) for the last 26 weeks equal at least 80% of the wages for the first 26 weeks. The amount of the credit is the lesser of $1,000 or 6.2% of wages (as defined for income tax withholding purposes) paid by the employer to the retained worker during the 52 consecutive week period.
This tax credit is worth up to 35% of a small business' premium costs in 2010 (25% for tax-exempt employers). On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers). It makes it more affordable for employers with low and moderate income workers afford to offer health insurance coverage to employees. A qualifying employer must cover at least 50% of the cost of health care coverage for some of its workers based on the single rate, have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible) and must pay average annual wages below $50,000. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
For further information on these or other tax credits please contact Shasta County Economic Development at 530-224-4920 for further assistance.
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