Tax credits can be one of the most valuable ways for finance leaders to make a difference in their organization's financial performance by helping reduce their tax burden. Unfortunately, many credits and their benefits are misunderstood, overlooked or underutilized. Finance leaders who want to be more aggressive at getting tax credits for which their organizations may be eligible can receive the advantages and complexities of various types of tax breaks.
Here is a roundup of helpful articles that explain more about how to claim relevant, eligible credits for your organization in a range of categories.
"Economic Issues Facing CFOs During a Downturn" — This article discusses the Work Opportunity Tax Credit (WOTC), available to businesses that hire and retain employees from historically disadvantaged and underrepresented groups, such as veterans, ex-felons and food stamp recipients. Eligible employees must work at least 120 hours in the first year of employment in order for the employer to qualify for the tax credit. Additionally, there are other key requirements for WOTC, such as screening applicants on or before the job offer date.
"Cost Reduction Through Tax Credits" — Employee training is a great investment for many reasons, but did you know that your organization might be eligible for special tax breaks and government assistance related to employee training and education? As described in this article, the Workforce Innovation and Opportunity Act (WIOA) helps provide local-level assistance with worker training and transitional jobs. The Internal Revenue Code also allows employers to deduct employees' taxable wages up to $5,250 per year for reimbursement or payment of tuition and other costs related to undergraduate or graduate level education as part of a qualified educational assistance program.
"Training Employees Pays Well" — Depending on which state your business operates in, you could qualify for state-level tax breaks for employee training. For example, Georgia offers the Georgia Retraining Tax Credit of up to $1,250 per Georgia-eligible employee per year. New York has similar tax breaks, and many states offer special tax benefits to employers that have apprentice programs.
"How to Negotiate a Tax Incentive for Your Business" — It might seem like tax credits are by-the-book and cut-and-dry — either you qualify or you don't. But the truth is, especially at the state level, it's often possible for organizations to negotiate a package of tax incentives that meets the needs of the business as well as the state and local jurisdictions. This article describes some examples of discretionary incentives where states and local authorities have room to negotiate, depending on the needs of your business and depending on the economic development situation in the geographic area where your business has a presence.
No matter what business you're in or where your organization is located, chances are good that you can do more to claim tax incentives or credits — whether it's for hiring, expansion, training employees or negotiating an overall package of tax incentives and grants. Don't leave money on the table. Be sure to investigate your options and pursue those credits your organization might qualify for, as part of your overall financial strategy. These four articles should help you figure out where to get started.
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