NY Youths Work Program – Tax Credit 2012

In an effort to encourage businesses in selected areas within the State of New York to hire unemployed, disadvantage youth Governor Andrew Cuomo signed the NY Youth Works Program into law.  The program will offer a tax credit to businesses who hire eligible youths ages 16 to 24 to support job training and employment.

In order to be eligible for the credit, businesses must register for certification with the NYS Department of Labor by November 30, 2012.  Certification may be subject to approval based upon the company’s compliance with state and federal laws and regulations, its location in relation to the target areas, job openings available, and other factors.  Priority will be given to businesses who offer advancement and employee benefit packages.

For participation in the program, youths between the ages of 16 to 24 years old must be unemployed and live in the Towns of Brookhaven or Hempstead; or the cities of Albany, Buffalo, New York, Rochester, Schenectady, Syracuse, Mount Vernon, New Rochelle, Utica, or Yonkers.   Additionally, the youth must meet one of the following conditions:

  • 18 years old, no longer in school, and doesn’t have a high school diploma or a GED certificate
  • A member of a family that is receiving assistance from Temporary Assistance for Needy Families (TANF)
  • A member of a family that is receiving SNAP benefits (food stamps)
  • A member of a family that is receiving Supplemental Security Income (SSI) benefits
  • Receiving a free or reduced-cost school lunch
  • Was referred by a rehabilitation agency approved by the State, or an employment network under the Ticket to Work Program
  • Has served in jail or prison – or are on probation or parole
  • Is pregnant or a parent
  • Is homeless
  • Is currently or was in foster care or the custody of the Office of Children and Family Services
  • Is a veteran
  • Is the daughter or son of a parent who is currently in jail or prison, or has been within the past two years
  • Is the daughter or son of a parent who is collecting unemployment insurance
  • Lives in public housing or receive housing assistance such as a Section 8 voucher

 

A business who hires an employee (who is certified to participate in the program) between January 1, 2012 and December 31, 2012, is eligible for a maximum tax credit of $4,000 ($2,000 for a part-time position). The credit is calculated at a rate of $500 per month for six months with an additional $1,000 if the youth is retained for one full year.  The credit is calculated half of said amount for part-time employment.  The credit is applied against the NYS Franchise Tax on Business Corporations (or against their annual tax filing for partnerships and Limited Liability Companies).  Any portion of the credit that exceeds the company tax liability may be received as a refund.

If you need more information on the NY Youths Work Program, please contact our office.  Additionally, employers may seek more information by contacting the New York State Department of Labor at info@youthworks.ny.gov or by phone at 1-877-226-5724.

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Planning for low-likelihood, high-impact events

Last summer, Hurricane Irene was a wake-up call for many of us as to the vulnerability of Long Island to get hit with a major disaster. But what if the disaster only hit your business? Could your business survive if you lost your most valuable asset…you or your key employees to an accident? A fire or flood can put a business out for good if it cannot recover quickly. “Up to 40% of businesses affected by a natural or human-caused disaster never reopen.” (Source: Insurance Information Institute)

Disasters don’t always come in large scales, but having a plan will improve your company’s ability to survive and recover no matter what size disaster strikes. There’s no “tailored” plan for every business or circumstance because everyone’s business is different.

Here are some ideas to start your thinking and planning:

Backup computer data systems regularly; “Off site” backups can be backed up on servers outside of the region.

Keeping apprised of community warning systems and evacuation routes.

Identify where you and your employees may seek shelter from all types of hazards.

Determine how to communicate with employees and customers in the event of an emergency.

Collect and assemble a disaster supply kit, including a portable generator.

Document Locations – Fireproof, crush-proof safe box to store crucial documents.

Cross train personnel and have the right people in place.

Document passwords and access codes to trustworthy individuals.

Review your insurance coverage and deductibles.

Types of emergencies include earthquakes, fire, electrical or other utility outages, hazardous materials spills, tsunami, and acts of terrorism or severe storms. These are all real possibilities, most without advanced notice. Remember a disaster plan exists for safety as well as business continuity.

Here are a few websites that offer free advice to emergency preparedness:

http://www.fema.gov
http://www.ready.gov/
http://www.preparemybusiness.org/

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The Patient Protection and Affordable Care Act – Individual Mandate

The United States Supreme Court issued its decision on the constitutionality of the Patient Protection and Affordable Care Act (“PPACA”) on June 28, 2012.  The court’s decision to uphold the law (with the exception of certain Medicaid provisions) protects numerous tax provisions for individuals and businesses alike.  As we await future IRS guidance on the provisions, let’s discuss some key factors of the individual mandate portion of the legislation.

 

Who Is Exempt?

Beginning 2014, the PPACA requires applicable individuals to carry minimum essential health coverage for themselves and their dependents or pay a penalty for each month of noncompliance. Several groups are considered exempt, such as individuals covered by Medicaid and Medicare, those with coverage under military health plans, undocumented individuals, incarcerated individuals, health care ministry members, members of an Indian tribe, and members of a religion conscientiously opposed to accepting benefits.  Additionally, no penalty will be imposed on those individuals without coverage for a period of 90 days within a one year period nor will it be imposed on individuals who are unable to afford coverage.  An individual will be treated as unable to afford coverage if the required contribution for employer-sponsored coverage or a bronze-level plan on a state exchange program exceeds eight percent of the individual’s household income for the tax year.  If an individual’s household income is below the income thresholds for filing income tax returns, they will be considered exempt as well.

         

What is the Penalty?

Beginning 2014, the penalty will be phased in over a three-year period with inflation increases indexed after 2016.  The penalty will generally be calculated by taking the greater of a flat dollar amount ($95 for 2014; $325 for 2015; and $695 in 2016 and later) or calculation based on a percentage of the taxpayer’s household income (1% for 2014, 2% for 2015, 2.5% for 2016 and later).  The penalty is prorated on a monthly basis.  The flat dollar amount for individuals under the age of 18 will be 50% of the aforementioned amounts.  The penalty amount cannot exceed the national average of the annual premiums of a “bronze level” health insurance plan offered through the exchange programs.

 

Conclusion

While the individual mandate has been debated immensely, it is only one provision of the PPACA.  Individual taxpayers and employers must prepare for sweeping changes in health care in coming years.  Many of the provisions in the PPACA have already been implemented while others, such as the individual mandate, are scheduled to take effect in future tax years.  Since passage of the PPACA, the IRS and the U.S. Departments of Health and Human Services (HHS) and Labor (DOL) have issued extensive guidance on the new law. The pace of guidance is expected to accelerate now that the law has been upheld by the Supreme Court.  We will continue to update our clients on the future development of the PPACA.

 

IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding penalties under any taxing jurisdiction or (b) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

 

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