California College Access Tax Credit

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Under bills SB 174 and SB 798 signed by Gov. Jerry Brown in September 2014, California introduced a creative way to increase funding for the Cal Grant B program, which provides money for books and living expenses to low-income college students. Contributions to the CATC (College Access Tax Credit) Fund are eligible for a federal charitable contribution deduction as well as California tax credit.  The amount of the California tax credit for years 2014-2016 is as follows:

60% for contributions during 2014

55% for contributions during 2015

50% for contributions during 2016

Since taxpayers are not allowed a deduction and a credit for the same contribution, any charitable deduction made to the CATC Fund claimed on a taxpayer’s federal income tax return must be added back as a state […]

Reimbursement of Employee Health Insurance Premiums (Including S Corporation Shareholders)

A little known and very under-publicized change to the insurance tax laws that took place on January 1, 2014, has exposed employers to a potentially heavy excise tax if they reimburse employees for health insurance premiums vs. enrolling in group plans.  This includes employee shareholders.

Employer reimbursements or direct payment of health insurance premiums for individual policies or coverage under a spouse’s policy may be deemed a group health plan subject to the Affordable Care Act’s (ACA) market reforms if they are made for more than 1 employee.  The deemed group health plan would not comply with the ACA’s benefit mandates for group health coverage and would be subject to excise taxes of $100 per day, per employee with no limit.

While the new […]

By |August 18th, 2015|Categories: Business Operations, Business Tax|Tags: , , , , , , , , , , , , |Comments Off on Reimbursement of Employee Health Insurance Premiums (Including S Corporation Shareholders)

Go-Biz publishes more details regarding the California Competes Tax Credit

The Governor’s Office of Business and Economic Development (GO-Biz) has adopted final regulations to implement the California Competes Tax Credit (CCTC) program. The final regulations are substantially similar to the emergency regulations that were adopted on November 17, 2014. GO-Biz administers the CCTC, which is a credit against the personal income tax and the corporation franchise (income) tax for businesses locating or expanding in California, based on an amount negotiated between GO-Biz and the taxpayer (as approved by the CCTC Committee).  For Frequently Asked Questions on how the CCTC works please click here.

Form 1095-A: Incorrect Data Sent for Computing Premium Tax Credit to 800,000 Taxpayers

The U.S. government’s Centers for Medicare and Medicaid Services (CMS) has announced that it sent incorrect data on Form 1095-A to approximately 800,000 taxpayers who purchased Federally-facilitated Marketplace health care coverage under the Affordable Care Act in 2014. Form 1095-A is the form that provides data for individuals to compute the Code Sec. 36B premium tax credit on their 2014 individual income tax returns.  CMS suggests that those taxpayers not file their 2014 returns until they receive corrected Form 1095-A, but has also provided alternative procedures.  For more information please visit the CMS blog or the healthcare.gov blog.

By |March 19th, 2015|Categories: Individual Tax|Tags: , , , , , , , , |Comments Off on Form 1095-A: Incorrect Data Sent for Computing Premium Tax Credit to 800,000 Taxpayers

California Discontinues Enterprise Zone Program

As of January 1, 2014, the State of California has discontinued the Enterprise Zone Program and commenced with the New Employment Credit Program in its place.  Employers may still use carryover credits from the discontinued Enterprise Zone Program for the next ten years and may earn hiring credits for eligible employees under the old program if they were hired before January 1, 2014.

The most significant change in the new program will now require qualified employers to certify eligible employees by requesting a Tentative Credit Reservation (TCR) online within thirty-days of completing the Employment Development Department (EDD) New Hire Reporting Requirements.  Furthermore, credit under the new program will be restricted to only qualified employers who have a […]

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