Paychex Tax Credit Services target two types of business tax credits: location-based and job creation tax credits.
Wage-based tax credits were designed to encourage economic development and create job growth in targeted areas throughout the country. A Paychex press release notes that these credits are incentives used to reduce business income tax liability at the state and federal levels. They can be used in the current year or can be carried forward to reduce tax bills in future years.
The Paychex Tax Credit Services include wage-based tax incentives offered by both state and federal governments. They are:
- Location-based tax credits – These are related to federal zones called Empowerment Zones and Renewal Communities. Businesses who locate their companies and hire people who live in designated tax credit zones can qualify for credits annually. Certain states also offer location-based tax credits.
- Job creation tax credits – These are the Work Opportunity Tax Credit (WOTC) and the Welfare to Work Tax Credit (WtWTC). They were created to encourage businesses to hire individuals who are part of targeted groups that have traditionally found it difficult to get work. The Work Opportunity Tax Credit, due to expire at the end of this year, was just extended by Congress for almost four more years – through August 31, 2011, according to Paychex.
All Paychex payroll clients will receive a free analysis to determine if they are eligible for state and federal tax credits, according to the press release.
More information about Paychex Tax Credit Services is available online at http://media.paychex.com/article_display.cfm?article_id=4368 , or by calling