November Tidbits
IRS Expedites Charity Applications in effort to help Hurricane Sandy victims
The Treasury Department and the Internal Revenue Service recently announced an expedited review and approval process will be offered for organizations seeking tax-exempt status in order to provide relief for victims of Hurricane Sandy. The IRS does encourage people to use existing organizations currently working on immediate aid since they tend to already have fund-raising and distribution infrastructures in place.
To apply for tax-exempt status, organizations need to file IRS Form 1023 and write at the top of the form “Disaster Relief, Hurricane Sandy.” The IRS will expedite those applications and ensure they meet the legal requirements for tax exemption. The web site of the Federal Emergency Management Agency (FEMA) and the U.S. Government’s main Web portal at FirstGov.gov both offer lists of organizations that provide support to victims of Hurricane Sandy. The IRS continually updates its on-line search feature, Select Check, that allows taxpayers to determine if a charity has IRS-approved tax-exempt status.
Leave-Donation Programs for Victims of Hurricane Sandy
On November 6, 2012, the Treasury Department and the Internal Revenue Service announced special relief intended to support leave-based donation programs to aid victims who have suffered from the extraordinary destruction caused by Hurricane Sandy. Under these programs, employees may donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for Hurricane Sandy victims.
Employees can forgo leave before January 1, 2014 in exchange for employer cash payments made. Under this special relief, the employee’s donated leave will not be included in their income or wages. Employers will be permitted to deduct the amount of the cash payment. More details about this relief are in IRS Notice 2012-69.
Employers Hiring Veterans by Year’s End May Get Expanded Tax Credit
Employers planning to claim an expanded tax credit for hiring certain veterans should act before January 1, 2013. Many businesses may qualify to receive thousands of dollars through the Work Opportunity Tax Credit, but only if the veteran begins work before the end of the year.
Below are six key facts about the WOTC as expanded by VOW to Hire Heroes Act of 2011.
1. Hiring Deadline: Employers may be able to claim the expanded WOTC for qualified veterans who begin work on or after Nov. 22, 2011 but before Jan. 1, 2013.
2. Maximum Credit: The maximum tax credit is $9,600 per worker for employers that operate for-profit businesses, or $6,240 per worker for tax-exempt organizations.
3. Credit Factors: The amount of credit will depend on a number of factors. Such factors include the length of the veteran’s unemployment before being hired, the number of hours the veteran works and the amount of the wages the veteran receives during the first-year of employment.
4. Disabled Veterans: Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
5. State Certification: Employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. The form must be filed within 28 days after the qualified veteran starts work.
6. E-file: Some states accept Form 8850 electronically.
Visit the IRS.gov website for more details about the expanded tax credit for hiring veterans.
