American Taxpayer Relief Act of 2012

Brian Kelly with CMS states that under the new ‘‘American Taxpayer Relief Act of 2012’’, H.R. 8 Senate Amendments. Employment tax credits for employers have been renewed though the end of 2013.

Work opportunity tax credit. This bill extends for two years, through 2013, the provision that allows businesses to claim a work opportunity tax credit equal to 40 percent of the first $6,000 of wages paid to new hires of one of eight targeted groups. These groups include members of families receiving benefits under the Temporary Assistance to Needy Families (TANF) program, qualified ex-felons, designated community residents, vocational rehabilitation referrals, qualified summer youth employees, qualified food and nutrition recipients, qualified SSI recipients, and long-term family assistance recipients. This provision is estimated to cost $1.773 billion over ten years.

Returning Heroes and Wounded Warriors Work Opportunity Tax Credits. Currently businesses are allowed to claim a work opportunity tax credit (WOTC) for hiring qualified veterans in the following targeted groups and up to the following credit amounts:
• Veterans in a family receiving supplemental nutrition assistance: $2,400
• Short-term unemployed veterans: $2,400
• Service-related disabled veterans discharged from active duty within a year: $4,800
• Long-term unemployed veterans: $5,600
• Long-term unemployed service-related disabled veterans: $9,600

A credit against Social Security taxes is also available to tax-exempt employers. Transfers are made from general revenues to make the Social Security trust fund whole. The provision expires on December 31, 2012. The proposal would extend these credits for an additional year, though 2013. This provision is estimated to cost $125 million over ten years.

Empowerment zone tax incentives. The bill extends for two years the designation of certain economically depressed census tracts as Empowerment Zones. Businesses and individual residents within Empowerment Zones are eligible for special tax incentives. This provision is estimated to cost $450 million over ten years.

Extension of tax incentives for the New York Liberty Zone. The bill extends through 2013 the time for issuing New York Liberty Zone bonds effective for bonds issued after December 31, 2009. This provision is estimated to have no cost over ten years.

About CMS

CMS helps companies of all sizes save money by taking advantage of the Work Opportunity Tax Credit. Call Brian Kelly at 1-800-517-9099 today to see if it makes sense for you.

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