Summer Employment May Come with Tax Credits
During the summer months, specific employers can take advantage of federal tax credits when they hire qualified summer youth employees.
The Work Opportunity Tax Credit (WOTC) falls under Code Sec. 51 and is a general business credit jointly managed by the IRS and the Department of Labor (DOL). This credit applies to wages paid to specific individuals who commence work on or before December 31, 2025. Any employer who hires and pays or incurs wages to these individuals, certified by a designated local agency (also known as a state workforce agency), as belonging to one of the ten targeted groups, is eligible to claim the WOTC.
Learn more about this tax credit here.
Biden to Create Temporary "On-Ramp" to Student Loan Repayment As Collection Actions Resume in September
In an announcement on June 30, 2023, the U.S. Department of Education (DOE) disclosed President Biden's latest measures to offer debt relief to student loan borrowers. These measures incorporate an "on-ramp" strategy to ease the transition into repayment once the loan repayment processes resume in September.
Amendments to the Higher Education Act in 1991 permitted the garnishment of employees' wages to repay delinquent student loans. An employer must comply with a lawful student loan garnishment order, or the employer will be liable for the amount not withheld from wages, in addition to punitive damages, court costs, and other legal fees.
If an employer unlawfully terminates an employee because of a student loan garnishment, the employer may be ordered to reinstate the employee with back pay and to pay punitive damages and legal fees.
Learn more about Biden's plan here.
IRS Continues to Warn Taxpayers About ERC Scams
The IRS is actively cautioning taxpayers about the aggressive promotion of employee retention credit (ERC) schemes by third parties and emphasizing that these promoters may provide misleading information regarding the eligibility requirements for this COVID-era tax credit.
The ERC is a refundable tax credit for businesses and tax-exempt organizations. The requirements differ depending on the period for which an employer claims the credit. The credit was available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before October 1, 2021
Learn the warnings of ERC scams here.