The Internal Revenue Service recently published more guidance about two business tax credits. Let’s take a quick look.
Revised Business Tax Credits
New Employer Credit for Paid Family and Medical Leave
Businesses can take advantage of a new credit that allows deductions for percentages of wages paid to qualifying employees who needed family or medical leave in 2018. This credit is associated with the Family and Medical Leave Act of 1993 (FMLA), which permits employees to receive pay if they need to take extended time off because of adoption, pregnancy, foster care placement, illness or military leave.
If you want to learn more about the new family and medical leave business tax credit, head over to the IRS’ FAQ page on the topic.
Rehabilitation Business Tax Credit (Real Estate)
Legislators made significant changes to the real estate rehabilitation tax credit. For starters, they repealed the 10 percent credit for pre-1936 buildings. But they did retain the 20 percent “credit for expenses to rehabilitate a certified historic structure.” However, taxpayers taking advantage of this credit must prorate the 20 percent credit over five years; you can’t claim it all in the building’s first year of service.
Owners can continue to use the old standards if:
- “The taxpayer owns or leases the building on Jan. 1, 2019, and at all times” after that, and
- “The 24- or 60-month period selected for the substantial rehabilitation test begins by June 20, 2018.”
Connect With a Business Tax Attorney
Market analysts and business publications are all urging the same thing: Work with a tax consultant to ensure you’re leveraging the new code and approved “sheltering” opportunities.
Our team has been dispensing profitable advice for a long time. And we’re here to guide you through the process. We’ll make sure you’re paying the least amount of taxes within the bounds of the law.
Based in Chicago, Illinois, we work with individuals and businesses in all 50 states. Get in touch today to begin the conversation.