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 credi t for employees and a health insurance subsidg forunemployed workers. Both are implemented througjh employers and require changes to payroll andCOBRw administration. Also in the act are multiple tax benefits that are designesd to encourage businesses and individuals to make capital The new law gives employees a tax credigt of upto $400 per worker and $800 for marrieds workers filing jointly against their 2009 and 2010 taxes. The revisexd withholding rates so workers get an immediate boos t intheir take-home pay. The new rates, in effecg since April 1, can be founsd in a February 21 news releaseat www.irs.gov/newsroom.
Workerzs don’t need to fill out a new W-4 withholdingb form to get the credit. However, individual with multiple jobs or married couples who both work may submit arevised W-4 to avoid owing a portion of the crediyt on their Form 1040. Employeese who are unsure should refer to IRS Publication 919 for guidance on tax The COBRA program offers employees and theird families who have lost healtnh insurance coverage in certain circumstances to buy into the healt insurance plans of theirformer employers, but those workers had to pay the premiums. Underf the stimulus plan, the government will cover 65 percent of COBRz premiums for up to nine months afteer a worker has beenlaid off.
This applie s to involuntary terminationsbetween 1, 2008 and Dec. 31, 2009. To be workers must have an adjusted gross incomer of lessthan $145,000 (or $290,009 for joint filers). Individuals who have exceedefd the income requirement must repayg any subsidy received when they file their tax Individuals with an adjusted gross incomebetween $125,000 and $145,000 (or $250,000 and $290,000 for joint will be required to repay a proportional amount of any subsid y they had received. While employers will have to pay the COBRA premiujmup front, they will be reimbursed in full by the IRS througn a credit against payroll tax liabilities.
Information about COBRA can befound at: Some stimulus provisions offer tax breakx for capital investments. Small businesses that invest in capita assets during 2009 can extend the depreciation to 50 perceng for thefirst year. In small businesses with net operating lossee in 2008 can offset their losses against income earned in up to fiveprior years. A tax incentivs set to expire this year allowed smalol businesses up toa $250,000 maximum deduction for assets purchaserd during 2008. The new act extends this through 2009.
Another program awards tax credits to businessews that create jobs for unemployed veterans and youthh who have not been regularly employed or attended schoolp in the pastsix months. The credif is 40 percent of thefirst $6,000 in For details, go to the busineszs tab at www.irs.gov. The American Recovery and Reinvestment Act containa manypotential benefits. For some of these benefits carry aprice – not in but in the need to update theid payroll, tax filings and other business processes.
Failured to do so coulfd result in penalties or missing out on potential In addition to government resources like the IRSand , business ownerw can consult payroll and benefitd providers, like Paychex Inc., that understande the stimulus bill. Your accountant is anotherd resource whocan help. In additio n to implementing these changes automatically for Paychex offers aWeb site, www.paychex.com/stimulus, to help explainj how the bill affects smallp businesses. Given the scope of the the speed with which theyare implemented, and the number of potentia l benefits, no business should feel alonde in dealing with this.