Two years ago, the HIRE (Hiring Incentives to Restore Employment) Act of 2010, which included new incentives to encourage
hiring, was signed into law. If you were one of those who hired a qualified employee (someone who began employment after Feb.
3, 2010, and before Jan. 1, 2011; was previously unemployed; and did not replace another employee), you were exempted from
paying the employer share of that team member's Social Security taxes. This payroll tax relief applied only to wages paid
between March 19, 2010 (the day after the enactment date) and Jan. 1, 2011. Those workers who qualified were required to complete
IRS form W-11 (see
http://dvm360.com/taxes2010 for more).
If you retained the employee for a year, the act also provides you with a tax credit of up to $1,000 per employee. The worker
needs to have been employed by you for at least 52 consecutive weeks, and the wages you paid during the last 26 weeks must
be equal to 80 percent or more of the wages for the first 26 weeks of the period. The upshot: If you had workers who qualified
in 2010 and were retained for a year, don't forget to claim your retention credit on your 2011 tax return—the one you need
to file by April 15, 2012.
Another credit to watch for comes from Obama's healthcare reform bill of 2010. Starting that year, the law began offering
tax credits as incentives for employers to provide health insurance coverage for their employees. Businesses with 10 or fewer
workers who have average annual wages of less than $25,000 can receive a credit of up to 35 percent of their health premium
costs each year through 2013. The credit is phased out for practices larger than that and disappears completely if a practice
has more than 25 employees or average annual wages of $50,000 or more. Beginning in 2014, small veterinary practices that
sign up with one of the yet-to-be-created health exchanges can receive a credit of up to 50 percent of their costs.
If you missed the tax credits for 2011 that you were etitled to, go back and amend your tax return. And stayed tuned for a
lot more tax changes this year.
Gary Glassman, CPA, a Veterinary Economics Editorial Advisory Board member, is partner with Burzenski & Co. in East Haven, Conn.