Tax Exemption for Small Businesses
Small Business owners may not know of the newly-revised payroll tax form, which eligible employers can use to take advantage of the special payroll tax exemption for new workers hired in 2010. This incentive was created as a part of the Hiring Incentives to Restore Employment (HIRE) Act, which I was proud to support. In addition to this provision, the HIRE Act provided for an expansion of the Recovery Act provision that enables small business owners to write-off certain capital expenses. I hope that many Pennsylvanian entrepreneurs will be able to take advantage of the provisions in this legislation to help improve their businesses and drive our economy forward in its recovery.
The payroll tax form has been posted on the Internal Revenue Service’s (IRS) website where you can find more information on this tax exemption.
In addition, many small business owners have expressed concern about the impact of the upcoming requirement mandating reporting of the value of health insurance coverage on employee’s Form W-2. The IRS confirms that employer-provided health coverage is NOT taxable. The IRS explains on its website that this reporting is for informational purposes, to show employees the value of their health care benefits so they can be more informed consumers. The value of the employer contribution continues to be excludible from an employee’s income and is not taxable. More information on this subject can also be found on the IRS website.