Is Your Growing Business Getting The Credits It Deserves?

July 15, 2011

In this economy, hiring, or the lack thereof, has remained a hot topic. If you are a small business owner or operator in California and have hired new employees, you will want to make sure that you filed for your tax credit.

According to the latest statistics just released by the California Employment Development Department, over 86,000 jobs have recently been added in California. So, the good news is that jobs are being created.

If you’ve contributed to economic growth by creating jobs, don’t miss out on what is owed to you in the way of new job tax credits. Unfortunately, many small businesses have not taken advantage of this credit. Whether it is because they are unsure if they qualify, unaware of the credits existence, or don’t think the credit is worth the effort, millions of dollars of credits are not being claimed. The state of California originally allocated $400 million for this tax credit, and as of July 2, 2011, $59 million has been awarded.
In 2009, California made a new jobs tax credit of $3,000 available to small businesses with 20 or less employees for each additional net full-time employee hired and employed in California for tax years beginning on or after January 1, 2009. Qualifying for the credit is actually quite simple. Your business must have had no more than 20 full time equivalent employees in the previous tax year, and your business must increase its number of full time equivalent employees in the current tax year. Of course, as with anything, there are some limitations and additional qualifications. The state of California Franchise Tax Board maintains a comprehensive definition of the credit and list of frequently asked questions on its website.

So you’ve done your part to boost the economy and you qualify for the credit, what are you waiting for?! You can claim the credit on a 2009, 2010 or later Personal Income Tax or Business Entity Tax Return using Form 3527 – New Jobs Credit. until the funds run out. For assistance and questions about this credit or any of your taxation or accounting needs, you can contact Wallace & Associates we have the latest information to keep you compliant and timely with filings.

If you are living in Los Angeles  and are interested in getting in touch with a CPA, then get in touch with us.