Specifically, I’m referencing the “geographic, wage-based employment tax credit program,” just one of several that we administer at RetroTax. Typically, we examine year-end payroll reports for our clients that send employees to work at sites that are located in Federal Empowerment Zones and/or Renewal Communities, nationwide. Using our proprietary mapping programs, along with other resource tools, we determine how many and which of those employees also live in these Zones, thereby creating tax credit opportunities for the employers. We calculate the credits available based upon the qualifying wages paid to these employees and along with all of the appropriate forms required by IRS, send that data and supporting documentation back to the clients and their accountants, for completion on their tax returns. If business owners have unknowingly left credits from prior tax years on the table, they may choose to amend returns from as many as three prior years and reclaim those dollars as well.
So, what if you’re not in one of these geographic zones? Well, don’t despair, as there are still opportunities for you, too. There are also demographic programs that may qualify you for wage-based credits as well, regardless of where the job sites are, or where the employees may live. We can administer those on a quarterly basis too, perhaps reducing the estimated quarterly payments that one would actually need to make, based upon the annualized dollar value of the credits anticipated.
Now comes the big question that every business owner we work with is interested in knowing: How long does it take to secure these tax credits? The answer to that question is very difficult to pin. Let’s break this question down into a couple of bite-sized chunks. First, with reference to demographic credits: while it is true that this is a Federal program, these credits must be certified by the individual states where the employment occurs. Thus, the answer to the question about how soon you will get the credit hinges upon the efficiency of each state’s certifying authority. That varies widely from state-to-state. We do most of the heavy lifting on our end, interacting closely with those that do your hiring, to be certain that each and every opportunity to certify an eligible new hire is realized, but at the end of the day, how soon those credits are actually certified, is a function of the individual states.
As for the geographic credits, they are realized with far more speed and efficiency, as the criteria for their generation is much simpler. Yes or no: “Does the business send the employee to work in a zone?” Yes or no: “Does the employee also reside in the zone?” Once we’ve documented this information from payroll reports provided by the client and mapped the appropriate address information utilizing our proprietary software, it is a function of creating a comprehensive supporting documentation package and providing that to our client, along with the appropriate IRS forms, for inclusion in their tax returns.
It is not too late to benefit from these tax credit programs for 2008. In fact, now is the time to jump on this and see just how much you may be eligible to claim. Remember, until your 2008 tax return is filed, we can actually research and potentially still have a positive impact on prior years ’07, ’06, and ’05 as well.
In any and all cases, what we offer are non-traditional administrative functions that most CPA firms do not provide. We are “SPECIALISTS IN THE ADMINISTRATION OF STATE AND FEDERAL WAGE-BASED TAX CREDIT PROGRAMS.” As such, we work closely with you, your Finance/HR professionals and CPA/accounting professionals to get the mission accomplished. Business owners should think outside the box in this economy. These tax credits provide an often overlooked and unrealized opportunity that many business owners should claim. We will be happy to fill you and your resource team in on the particulars. I’d be happy to hear from you personally at stan.friedman@retrotax.com
Posts
