Tag Archive for IRS Form 3800

IRS Forms 8941 + 3800 Calculating + Claiming Small Business Health Care Tax Credit

For tax years 2010 to 2013, the maximum credit for eligible small business employers under the Small Business Health Care Tax Credit is 35 percent of premiums paid and for eligible tax-exempt employers the maximum credit is 25 percent of premiums paid.  Beginning in 2014, the maximum credit will go up to 50 percent of qualifying premiums paid by eligible small business employers and 35 percent of qualifying premiums paid by eligible tax-exempt organizations.

Start by determining if your organization qualifies for the credit by assessing whether it has less than 25 full-time equivalent employees that earn an average wage of less than $50,000 a year and your organization pays at least half of employee health insurance premiums. If your organization meets this criteria it is referred to as a “qualifying business.” Next use IRS Form 8941 Credit for Small Employer Health Insurance Premiums. Last use IRS Form 3800, General Business Credit, to claim the credit.

Tax-exempt organizations can use IRS Form 8941 to calculate the credit and then claim the credit on IRS Form 990-T, Exempt Organization Business Income Tax Return.

If your organization couldn’t use the credit in 2011 there may be eligible to claim it in future years. Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.

Also be sure to check out the IRS’ YouTube Video on the topic

Claim IRS Tax Credit for Hiring Veterans

The VOW to Hire Heroes Act of 2011, provides an expanded Work Opportunity Tax Credit (WOTC) to businesses that hire eligible unemployed veterans and for the first time also makes the credit available to certain tax-exempt organizations. IRS Notice 2012-13, posted today on IRS.gov, and the instructions  for IRS Form 8850 provide details in support of the following…

According to the IRS the credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations. The amount of the credit depends on a number of factors including:

* the length of the veteran’s unemployment before hire,

* the hours a veteran works and

* the amount of first-year wages paid.

Employers who hire veterans with service-related disabilities may be eligible for the maximum credit.

Normally, an eligible employer must file IRS Form 8850 with the state workforce agency within 28 days after the eligible worker begins work. But according to the new IRS guidance, employers have a little more time with definitive expiration.

In an effort to streamline the certification requirements, the IRS will allow the use of electronic signatures and fax when gathering the IRS Form 8850 for transmission with state work force agencies willing to work in this fashion.

Businesses claim the credit on their income tax return. The credit is first figured on IRS Form 5884 and then becomes a part of the general business credit claimed on IRS Form 3800.

This credit is also available to certain tax-exempt organizations by filing IRS Form 5884-C.  The guidance released today also provides instructions and a new set of forms for tax-exempt organizations to claim the credit.

Rental Real Estate Energy Efficient Upgrades Eligible for Tax Credit on IRS Form 3800

If you own an office building that rents to various tenants and would like to install solar panels on the roof to generate electricity, and a geothermal heating and cooling system you may be eligible for a tax credit for these items. IRC §48 allows you to claim a tax credit equal to 30% of the basis of the solar panels placed in service during the year, and 10% for the geothermal heating and cooling system.  Property eligible for the credit includes amortize-able or depreciable property that meets certain government standards and is constructed, reconstructed, or erected by the taxpayer (or acquired by the taxpayer if original use begins with the taxpayer) that:

Uses solar energy to generate electricity, heat or cool a structure, or provide solar process heat;

Uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight (for periods ending before 2017);

Is used to produce, distribute or use energy derived from a geothermal deposit as defined by IRC Sec. 613(e)(2);

Is qualified fuel cell or microturbine property;

Is combined heat and power system property;

Is qualified small wind energy property; or

Uses the ground or ground water as a thermal energy source to heat or cool a structure (for periods ending before 2017).

The energy percentage does not apply to the portion of the basis of any property that is attributable to qualified rehabilitation expenditures. The basis of the property on which the credit is claimed must be reduced by 50% of the energy credit, even if the full amount is not used in the current year [IRC Sec. 50(c)].

The energy credit can be used to offset AMT liability without limitation and is subject to a five-year recapture rule if the property is disposed of. The amount recaptured is reduced 20% for each year the qualifying property is held [IRC Sec. 50(a)(1)].

This credit is claimed using Form 3468, Investment Credit, and becomes part of the taxpayer’s Section 38 general business credit (GBC). If there is a GBC in addition to the energy credit, the energy credit is carried to Form 3800, General Business Credit