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Hurricane Relief Law with Tax Credit for Employers

URGENT: President Trump signed into law the Disaster Tax Relief and Airport and Airway Extension Act of 2017 on September 29, 2017. The purpose of law is to deliver targeted tax relief to victims of Hurricanes Harvey, Irma, and Maria. This includes an employee retention tax credit for employers.Hurricane

Qualifying businesses with locations within the disaster zones can seek a retention tax credit for continuing to pay their employees during the timeframe that the business was impacted by the disaster. Employers can seek a 40% credit for wages paid to employees (up to a maximum wage base of $6,000) during the period the business location became inoperable due to the hurricane(s) up until the date the location resumed operations, or until January 1, 2018, whichever comes first. The credit cannot be taken on the same wages used to calculate the WOTC program for an eligible employee for the same period.

The designated disaster zones are as follows:

Hurricane Harvey:

Counties in TX (39): Aransas, Austin, Bastrop, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tyler, Victoria, Walker, Waller, Wharton

Hurricane Irma:

Counties in FL (48): Alachua, Baker, Bradford, Brevard, Broward, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Flagler, Gilchrist, Glades, Hardee, Hendry, Hernando, Highlands, Hillsborough, Indian River, Lafayette, Lake, Lee, Levy, Manatee, Marion, Martin, Miami-Dade, Monroe, Nassau, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, St. Lucie, Sumter, Suwannee, Union, Volusia

Counties in GA (7): Camden, Charlton, Chatham, Coffee, Glynn, Liberty, McIntosh

Hurricane Maria:

Areas in Puerto Rico (10): Arecibo (Municipio), Canovanas (Municipio), Carolina (Municipio), Catano (Municipio), Cayey (Municipio), Ciales (Municipio), Juncos (Municipio), Las Piedras (Municipio), Manati (Municipio), Naranjito (Municipio)

Clients should contact your CCC Account Executive for assistance with filing this disaster tax credit relief.

Future Client? Please contact CCC via email at info@corporatecostcontrol.comor by telephone at (800)207-6926


Unemployment Tax Update:

NASWA

naswa_logoNASWA is the National Association of State Workforce Agencies.  NASWA delivers policy expertise on workforce development, including unemployment insurance and other transitional support, as the voice of state workforce agencies.

Corporate Cost Control attended the NASWA meetings this year in Coeur A’Lene, Idaho.  Forty-three states plus District of Columbia and Guam attended the summit.   The subject matter was re-employment and UI Integrity.   The state agencies have been assigned a 3% reduced budget and are being charged with helping the long term unemployed find employment.    Typically, the under privileged and individuals over fifty are remaining unemployed for longer periods of time than the educated middle and upper class.

What does the 3% reduced budget mean to employers?    Pennsylvania laid off half of the state’s employees resulting in slower processing of mergers and acquisitions.   Connecticut is going to dissolve their joint accounts as they do not have the manpower to do the work.   Delaware and Georgia are behind in processing new registrations because of reduced manpower.     As we get closer to 2018, more states will cut programs that were previously beneficial for employers.

Many state agencies have begun partnering with companies such as AARP, Monster Government Solutions and Sagitec just to name a few.   Monster Government Solutions supplies tweets to the unemployed while Sagitec sets up processing systems that are interactive for the unemployed.   Oklahoma has set up an application for the smart phones so their unemployed can look for job opportunities any time of day.

So, what does this mean for employers?   If more individuals come into the workforce, the trust fund balances of the states will continue to increase as wages subject to contributions are paid.    A healthier trust fund balance allows for lower rate schedules and multipliers to be in place.   An increased workforce can result in lower taxes for the employers.

Integrity was another subject among the state agencies.  Although fraudulent claims have always been a burden for the state agencies, during the recession the number of fraudulent claims increased tremendously.    NASWA has set up integrity training modules to work with the agencies to improve the operations and investigation of fraudulent claims.   UI Tax Integrity and UI Data and Analytics are under development by NASWA.   Any improvements made by the agencies relating to fraudulent claims will improve the trust fund balance in the future.

As we have mentioned in past newsletters, all states are required to have a AHCM (Average High Cost Multiple) of 1.0 by the end of year 2019.   The AHCM is a complicated formula covering 20 years of unemployment history.  The Department of Labor believes that if all state has an AHCM of 1.0, they will not need to borrow funds from the federal government during a major downturn in the economy.   Unemployment and Job Placement complement each other.  Next year the sessions UI and Job Placement will be combined.

Please contact our tax director,  Norma Green, at (800) 207-6926, Ext. 418 or ngreen@corporatecostcontrol.com.


Guideline

CCC’s Additional Services

CCC is a Workforce Solutions provider with offices throughout the United States. CCC offers customized, bundled and stand-alone solutions to help employers improve performance and reduce costs through a variety of services related to Human Resources, Payroll and Tax. CCC’s core competency always has and will remain Unemployment Cost Management Services. CCC also provides additional services to assist our clients with services which are frequently related to Unemployment Cost Management Services. These include:

CONTACT US TO RECEIVE A FREE ANALYSIS OF YOUR CURRENT PROCESS AND A PROJECTION OF POTENTIAL SAVINGS.

Contact CCC to see how we can save your organization time and money. Contact our Sales Team (800) 207-6926

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