With the expiration of the Hurricane Katrina work opportunity tax credits in 2009, we would like to remind you of some of the other potential tax credits for your business. Please review the information below and contact our office with any questions.
Louisiana Research and Development Tax Credit. Any taxpayer who employs up to 50 Louisiana residents and incurs qualified research expenses for the taxable year, as defined in 26 U.S.C. §41(b) may be eligible for a Louisiana research and development credit even though a credit has not been taken on the federal return. Starting with tax year 2009, the tax credit will be refundable.
The credit amounts vary by year, and any expenses you feel may qualify should be reviewed so that the appropriate forms can be filed with the Louisiana Department of Economic Development.
You may not realize you are doing the type of activity that could qualify. Many clients regard their own efforts to make new, lighter, stronger, cheaper, more reliable products, or to make more precise, more economical, and more versatile processes as “just doing my job,” when in fact they have been performing R&D qualifying activities all along. For example, if you design products or product alternatives, if you make significant product modifications or if you experiment with new materials to improve manufactured products, you may qualify. There are many more examples and many industries (architects, engineers, manufacturers, certain oilfield service, etc.) that may qualify. We can assist you in exploring these areas further to determine if you qualify.
Federal Work Opportunity Tax Credits. These groups are listed on IRS Form 8850. Some of them include:
- qualified felons hired not more than one year after the later of their conviction or release from prison;
- certain disconnected youth, and qualified summer youth employees who perform services during any 90-day period between May 1 and September 15 who live in an empowerment zone, enterprise community, or renewal community;
- qualified individuals in families receiving Temporary Assistance to Needy Families (TANF) payments
- veterans who are members of families receiving food stamps or who have service-connected disabilities, and certain unemployed veterans
- designated community residents; age 18 through 39 who live in an empowerment zone, enterprise community, rural renewal community or renewal community;
- vocational rehabilitation referrals certified to have a physical or mental disability;
- individuals age 18-39 who are in families that have been receiving food stamps for a certain number of months;
- supplemental security income (SSI) recipients
The credit is up to $2,400 per qualifying individual. In order to take the Work Opportunity Credit, these employees must be certified with the state within 28 days of hire. The forms for certification are FORM 8850 and ETA FORM 9061.
After the employee is certified, please keep a record of the number of hours worked and wages paid in their first year of hire. This information will be used for the calculation of the credit.
If you are interested in learning more about these potential tax credits, please call to set up an appointment for us to meet in person..
