PayMaster makes sure that our clients receive all of the tax credits that they deserve.
Currently, the Affordable Care Act, the WOTC and the Excess FICA Tip Credit
are available to qualified companies. PayMaster is constantly monitoring changes in
applicable legislation and regulations to ensure compliance.
The Welfare To Work (WTW) and Work Opportunity Tax Credit (WOTC) are incentives to private,
for profit employers to hire individuals from certain targeted groups. These credits can go
up to $2,400 per new hire in the first year and as much as $9,000 in the second year.
Our Tax Credit Service helps your company obtain these credits by providing guidance in
preparing pre-screening certifications, monitoring of pertinent job applicant information to
verify eligibility, and providing post-hiring documentation of hours worked and wages paid to
determine the amount of the applicable credit.
PayMaster provides a report of tax credits earned at the end of the year, and includes
preparation of annual tax credit forms, including IRS forms 8861 and 5884. Our service is on a
contingency basis, so if you do not receive a credit, there is not a charge.
If you provide health insurance to your employees and pay more than 50% of the premium, you can
qualify for the Small Business Health Care Tax Credit. Up to 35% of the employer paid health insurance
premiums can be taken as a tax credit, and by 2014, this credit will go up to 50%. Non–Profit
organizations are also eligible for up to 25% credit, increased to 35% in 2014.
The maximum credit is available if your average annual wages are less than $25,000 and you have 10 or
less employees. Between $25,000 and $50,000 in annual wages and between 10 and 25 Full Time Equivalent
employees the credit gradually phases out.
After the end of each calendar year, PayMaster will provide you with a report indicating your Full Time
Equivalent (FTE) employee count and your average annual wage along with any phase out factor, if
applicable. These numbers will be used to calculate the credit as determined by the amount of health
insurance premium you paid on your employees for the entire year. This credit is taken on your annual
federal tax return.
A food and beverage establishment is allowed a general business credit for the amount of the
employer's excess FICA tax obligations attributable to employee tips received on the establishment's
premises, in excess of those tips treated as wages for purposes of satisfying the minimum wage rate
applicable to such individuals under Section 6(a)(1) of the Fair Labor Standards Act of 1938 (FLSA).
Under Sec. 45B(b)(2), the "excess employer's social security tax" is taken into account only for tips
received from customers in conjunction with providing food or beverage for consumption on the
premises of an establishment at which tipping of employees serving the food or beverages is customary
or for tips received from customers in connection with the delivery of food to the customer if the
tipping by customers is customary.
PayMaster produces the report that gives you the tax credit amount for reduction of your business tax
liability. Our report gives you the current and YTD (Year to Date) amount each payroll, so you know
exactly where you stand throughout the year.