November 19, 2015
Small Employer Pension Plan Startup Cost Credit: Certain small business employers that did not have a pension plan for the preceding three years may claim a nonrefundable income tax credit for expenses of establishing and administering a new retirement plan for employees. The credit applies to 50% of qualified administrative and retirement-education expenses for each of the first three plan years. However, the maximum credit is $500 per year.
Credit for Employee Health Insurance Expenses of Small Employers: Eligible small employers are allowed a credit for certain expenditures to provide health insurance coverage for their employees. Generally, employers with 10 or fewer full-time equivalent employees (FTEs) and an average annual per-employee wage of $25,800 or less are eligible for the full credit. In 2015, the credit amount begins to phase out for employers with either 11 FTEs or an average annual per-employee wage of more than $25,800. The credit is phased out completely in 2015 for employers with 25 or more FTEs or an average annual per-employee wage of $51,600 or more. For 2015, the credit is available on a sliding scale for up to 50% of the employer's contribution toward employee health insurance premiums, is only allowable if the health insurance is purchased through a Small Business Health Options (SHOP) Exchange, and is only available for two consecutive taxable years.
Employer-Provided Child Care Credit: For 2015, employers may claim a credit of up to $150,000 for supporting employee child care or child care resource and referral services. The credit is allowed for a percentage of “qualified child care expenditures,” including for property to be used as part of a qualified child care facility, for operating costs of a qualified child care facility, and for resource and referral expenditures.
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One of the advantages of someone running their own business is hiring family members. But when including family members in business operations, certain tax treatments and employment tax rules apply. Here are some facts to know when working with a spouse, parent or child.
Both spouses carrying on the trade or business
If spouses carry on a business together and...