Small Employer Health Care Tax Credit 2010

During March, 2010, Washington enacted two new laws collectively known as the Health Care Reform Acts. This is far reaching legislation with many aspects phasing in over a period of years. The Health Care Tax Credit became effective immediately and may impact the tax returns of employers offering health insurance coverage for employees.

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Rental Property Owners Now Must
Issue 1099's To Their Vendors

On September 27, 2010, the President signed the Small Business Jobs Act of 2010 ("SBA") which includes a wide range of tax breaks and incentives for small businesses, along with various revenue raisers to offset these same incentives. One SBA provision puts a new reporting burden on individuals that own and rent property. Beginning in 2011, recipients of rental income from real estate will be subject to the same information-reporting requirements as taxpayers engaged in a trade or business - meaning you will need to issue 1099's to your vendors.

While rental property owners will not prepare their first 1099 until 2012, we suggest you start accumulating tax information from your suppliers and maintaining adequate records of payments to service providers beginning on January 1, 2011.

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HEALTH CARE ACTS OF 2010
Many Changes Over Many Years

The Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act (which are collectively referred to as the healthcare legislation) were signed into law in March. Lots of tax changes are included in the laws. Some have nothing to do with healthcare, some won't kick in for several years, some are effective right now, and some are even retroactively effective.

This chart briefly summarizes some of the most important tax changes, organized by the year when they become effective.

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FEDERAL HIRE ACT

President Obama has signed into law the Hiring Incentives to Restore Employment (HIRE) Act, which is focused on accelerating the hiring of unemployed workers.

The HIRE Act has many provisions that impact employers, including a payroll tax exemption, and increased tax credits for employers that meet certain eligibility requirements. The legislation immediately enhances employer's cash flow by permitting employers to retain the employer portion of the Social Security tax ordinarily remitted.

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