Are You Familiar with the Credit for Employer Differential Wage Payments?
Laura has decided to hire Regina to work in her salon as a receptionist/manager. Regina has just transitioned out of the military and is now serving the remainder of her time in the National Guard. Laura knows she made a great decision hiring Regina, because she brings leadership and organization to the business, and Laura sets her salary accordingly.
A year after Regina began at the salon, a hurricane hits the East Coast and the National Guard has received orders to assist. Laura pays Regina the difference between her salary and her income from the National Guard for the 2 months that Regina is gone.
Laura will be able to claim differential wage payments up to $20,000 because Regina is a qualified employee that has been on active duty for more than 30 days and was an employee for the 91-day period prior to any differential wages being paid.
According to the IRS, a qualified person must be,
“performing service in the uniformed services of the United States while on active duty” and “Uniformed services means the Armed Forces; the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty; the commissioned corps of the Public Health Service; and any other category of persons designated by the President in time of war or national emergency”.
If you have employees that fall into the category of a qualified person, you need to evaluate the credits you could be missing.
For assistance, contact firstname.lastname@example.org or 407-988-5647.
Categories: Tax Information