As a small business owner, your employees are the heart and soul of your organization. Many entrepreneurs understand the importance of a diverse, inclusive workforce and the benefits it brings, not just to the business, but to the community at large.
Your commitment to hiring practices that uplift veterans, marginalized communities, and those facing barriers to employment is commendable. But did you know the federal government offers incentives that can support and reward these practices?
Beyond the satisfaction of providing jobs and supporting community members, there are tangible financial incentives available for businesses.
Four Credits and Incentives
Here are four credits and incentives that can make a significant difference:
Employee Retention Tax Credit: The ERC was born out of the need to address economic challenges stemming from the Covid-19 pandemic. If your business has faced disruptions, but you’ve worked hard to keep your team together, this credit offers a financial cushion. By retaining your staff during these trying times, you may qualify for this advantageous tax break.
Work Opportunity Tax Credit: Are you looking to expand your team? The WOTC offers an opportunity to benefit from hiring within 10 specific groups facing employment barriers.
This credit not only helps decrease your tax liability but also supports the broader goal of workforce diversity and inclusion. With its recent extension until December 31, 2025, there's ample opportunity for businesses to take advantage of this incentive.
Differential Wage Payment Credit: If you're an employer who continues to pay employees while they're on active military duty, this credit is for you. You could be eligible for a credit amounting to 20% of up to $20,000 of differential wage payments for each qualifying employee. This initiative supports businesses that stand by their employees who have chosen to serve the country.
Paid Family and Medical Leave Credit: Recognizing the importance of work-life balance and the need for time off during critical life events, this tax credit is designed for employers offering paid family and medical leave. By supporting your employees during moments that matter most, you're not just nurturing a positive work environment, but also receiving financial rewards for doing so.
Being a business owner is more than just profit margins and balance sheets – it's about nurturing a community, fostering growth, and making a positive impact. The above incentives underline the fact that when businesses take care of their employees and the community, everyone wins.
If you're already utilizing these practices, ensure you're availing these credits. If not, consider them as avenues to further your community support while benefiting your business.
As always, it's essential to consult with tax professionals to ensure compliance and optimize the benefits of these incentives.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
This article was prepared by FMeX.
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