Washington Watch - June 3, 2010


Washington Watch - June 3, 2010

House Approves Funding For SBA Loans, Expands S Corp Payroll Tax

According to the House Ways and Means Committee, the stimulus package has been kind to small businesses. The stimulus bill last year increased resources for SBA loan programs, resulting in the creation or retention of over 650,000 jobs. The House recently passed American Jobs and Closing Tax Loopholes Act (H.R. 4213) to extend funding to certain stimulus programs, including SBA loans, which were so popular that the funding was exhausted twice.

However, with the good news also comes some bad news for small businesses. The bill is partially offset by a broad expansion of the S corporation payroll tax to firms in service industries. Visit the S Corporation Association of America for details on this provision.

With the primary election season in full swing, many candidates are feeling pressure from their constituents regarding the federal deficit. The bill, which now goes to the Senate for debate, passed with few votes to spare as some House members have shifted their outlook to fiscal conservation versus job creation.

Visit the House Ways and Means page for more information on the H.R. 4213.

White House: Oil Spill Relief For Businesses

The following are some of the most pertinent provisions laid out for businesses and families affected by the deepwater oil spill off the Gulf Coast. Visit the dedicated BP spill page on WhiteHouse.gov by clicking here. A chronology of the ongoing administration-wide response, beginning on April 20, is available here.

  • Federal Mobile Medical Unit Arrives in Louisiana: A federal mobile medical unit arrived in Venice, La., to provide additional basic medical care for responders and residents of coastal communities affected by the oil spill. The mobile medical unit, provided by the U.S. Department of Health and Human Services in coordination with the Louisiana Department of Health and Hospitals, will integrate with the local medical community to triage and provide basic care for responders and residents concerned about health effects of the oil spill. Patients then can be referred to local healthcare providers or hospitals.
  • Property Damage Claims Processed: The administration will continue to hold the responsible parties accountable for repairing the damage, and repaying Americans who’ve suffered a financial loss as a result of the BP oil spill. BP continues to process claims via its claims website (www.bp.com/claims) and its helpline (1-800-440-0858). BP reports that 30,619 claims have been opened, from which $39.4 million have been disbursed. No claims have been denied to date. There are more than 481 claims adjusters on the ground. To file a claim, visit www.bp.com/claims or call BP’s helpline at 1-800-440-0858. Those who have already pursued the BP claims process and are not satisfied with BP’s resolution can call the Coast Guard at (800) 280-7118.

Form To Claim Payroll Tax Exemption For Hiring New Workers Now Available

The Internal Revenue Service has issued the newly revised payroll tax form that most eligible employers can use to claim the special payroll tax exemption that applies to new workers hired during 2010.

Designed to encourage employers to hire and retain new workers, the payroll tax exemption and the related new hire retention credit were created by the Hiring Incentives to Restore Employment (HIRE) Act signed by President Obama on March 18.

Employers who hire unemployed workers this year (after Feb. 3, 2010, and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from the employer’s share of Social Security tax on wages paid to these workers after March 18. This reduction will have no effect on the employee’s future Social Security benefits. The employee’s 6.2 percent share of Social Security tax and the employer and employee’s shares of Medicare tax still apply to all wages.

In addition, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, businesses may claim a new hire retention credit of up to $1,000 per worker on their income tax return. Further details on both the tax credit and the payroll tax exemption can be found in a recently expanded list of answers to frequently asked questions about the new law now.

These two tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify as long as they are replacing workers who left voluntarily or who were terminated for cause and otherwise are qualified employees. Family members and other relatives do not qualify for either of these tax benefits.

For more information on eligibility requirements, please visit the IRS site at: http://www.irs.gov/businesses/small/article/0,,id=220745,00.html

Washington Watch Online

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Courtesy of NASE.org