4 Ways To Offer Employee Benefits And Get Tax Credits Too
As an employer, you want to build employee loyalty while still turning a healthy profit. One way to do this is to make use of benefits for which your company can get tax credits. What type of credit-worthy benefits should you provide? Here are a few options you may want to consider.
Health Insurance. Health care coverage is one of the top priorities of many American workers. As a small employer, you may not be obligated to provide health insurance, but doing so provides benefits to everyone. The Affordable Care Act, for instance, includes a tax credit for small employers who pay at least 50% of the cost of premiums for employee coverage.
Paid Leave. FMLA (Family and Medical Leave Act) provisions require most employers to provide unpaid leave for things like medical emergencies, family care, and the birth of a child. However, if you choose to go above and beyond by offering paid leave, you can attract and keep high quality employees. The Paid Family and Medical Leave Credit provides a tax credit of between 12.5% and 25% of wages paid. Such wages don't have to be the employee's normal complete salary, but the credit increases as the employer provides more.
Pension Plans. Want to offer a retirement plan that sets you apart from the crowd? With most employers offering nothing more than a standard 401(k) or even a generic IRA, having a pension can be a big draw. And the IRS can help. The Pension Plan Start-Up Costs Credit provides up to $500 annually as a credit against up to 50% of the expense of getting a pension plan up and running.
Child Care. Child care can be one of the most expensive elements of having a full-time job. Onerous costs and the lack of trustworthy options lead many parents to be less available for employers and to become underutilized. If your staff suffers from this problem, why not consider adding a child care facility on-site? You could collect a tax credit of up to 25% of the expense (up to $150,000 annually).
Which of these benefits could help your business attract and retain good employees? No matter which you choose, you can get financial assistance with any of them. There are, of course, various rules and documentation necessary to qualify, so care is needed before making your decision. Learn more by consulting with an experienced accounting services company today.
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