Did you know you can hire employees for your Schedule C business, and you’ll get several tax credits as a result?
If you offer any of the following, learn the tax credits you may be eligible to receive.
- Family Medical Leave – You can offer your employees paid time off to deal with family issues and get a tax credit for it. (FMLA is not required by law)
- Small Employer Pension Start-Up Cost Credit – You can offer your employees a retirement plan and get a credit for the start-up costs. This includes any retirement plan such as a 401K or defined benefit plan.
- Health Insurance Premium Credit – Small employers with less than 50 employees aren’t required to offer health insurance, but if you do, you can take the small business health care tax credit for up to 2 years.
- Work Opportunity Tax Credit – This credits employers who hire people from groups that face difficulties finding employment.
- Employer-Provided Childcare – If you have a childcare facility on-site or contract with a local childcare facility to help your employees with childcare, you can get the credit. Most companies choose to contract with a popular childcare facility as it’s the more affordable option.
- Employer Differential Wage Payments to Military Personnel – If you have employees in the Reserves, and they are called to duty, yet you continue to pay them for 30 days or more, you can take a credit of the lesser of $20,000 or 20% of the payments made.
- Empowerment Zone Employment – If you place your business in an area designated by the government as ‘empowerment zones’ or areas of high poverty and unemployment, you can claim this credit. Look into the zones, as you may be surprised to see where you can have your business, it’s not as unattractive as it sounds. If you take this credit, it’s equal to 20% of the first $15,000 paid to employees if they live and work in the zone and work for you for at least 90 days.
Each of these tax credits are non-refundable. This means you can only take as much credit as you owe. If the credit is higher than your tax liability, you can only take the amount that brings your liability to zero – you can’t get a refund for the difference.
If you would like to learn more about these tax credits and how they may help your business, contact us today at 714-383-2307.