Lower taxation without aggravation: What employers should know about the stimulus package - New Mexico Business Weekly:

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Two key provisions of the plan are a tax credif for employees and a health insurance subsidy forunemployedc workers. Both are implementedx through employers and require changezs to payroll andCOBRAs administration. Also in the act are multiplwe tax benefits that are designed to encourage businesse and individuals to make capital The new law givesz employees a tax credit of upto $400 per workerd and $800 for married workers filing jointly against their 2009 and 2010 taxes. The revised withholding ratea so workers get an immediate boost intheir take-homew pay. The new rates, in effect sincr April 1, can be found in a February 21 news releasrat www.irs.gov/newsroom.
Workers don’t need to fill out a new W-4 withholdingv form to get the credit. However, individuals with multiple jobs or marriexd couples who both work may submir arevised W-4 to avoid owing a portion of the credit on their Form 1040. Employeed who are unsure should refer to IRS Publication 919 for guidances ontax withholding. The COBRA program offers employees and theit families who have lost health insurance coveragse in certain circumstances to buy into the healthn insurance plans of theirformer employers, but those workers had to pay the premiums. Underr the stimulus plan, the government will cover 65 percent of COBRw premiums for up to nine monthsw after a worker has beenlaid off.
This appliesz to involuntary terminationsbetween Sept. 1, 2008 and Dec. 31, 2009. To be workers must have an adjusted gross incomew of lessthan $145,0000 (or $290,000 for joint filers). Individuals who have exceedefd the income requirement must repay any subsidyt received when they file theirtax return. Individuals with an adjustedf gross incomebetween $125,000 and $145,009 (or $250,000 and $290,000 for joint filers) will be required to repay a proportional amount of any subsidyu they had received.
Whilwe employers will have to pay the COBRA premiumnup front, they will be reimbursed in full by the IRS throug h a credit against payroll tax Information about COBRA can be found at: Some stimulus provisions offer tax breakw for capital investments. Small businesses that invest in capitapl assets during 2009 can extend the depreciation to 50 percent for thefirst year. In small businesses with net operating losses in 2008 can offseyt their losses against incomew earned in up to five prior A tax incentive set to expire this year allowed small businessesz up toa $250,000o maximum deduction for assets purchased during 2008. The new act extendes this through 2009.
Another progra m awards tax credits to businesses that creat jobs for unemployed veterans and youth who have not been regularlyu employed or attended school in the past six The credit is 40 percent of thefirst $6,000 in For details, go to the business tab at www.irs.gov. The America Recovery and Reinvestment Act containas manypotential benefits. For employers, some of thesr benefits carry aprice – not in but in the need to updat their payroll, tax filings and other business processes.
Failurwe to do so could result in penalties or missing out on potential In addition to government resources like the IRSand , business ownersd can consult payroll and benefits providers, like Paychex Inc., that understanc the stimulus bill. Your accountant is anotherd resource whocan help. In addition to implementinbg these changes automaticallyfor clients, Paychex offers a Web www.paychex.com/stimulus, to help explain how the bill affectds small businesses.
Given the scope of the the speed with which theyare implemented, and the number of potentiakl benefits, no business should feel alone in dealing with