How is the tax credit calculated for employers with more than 10 FTEs and/or average annual wages over $25,000?
As long as the employer has fewer than 25 FTEs and pays annual average wages under $50,000 (and meets other specified requirements) they are eligible for a tax credit on a sliding scale basis. A standard formula is used to reduce the full tax credit. If there are more than 10 FTEs: The reduction is determined by multiplying the full credit amount by a fraction: the numerator is the number of FTEs over 10 and the denominator is 15. If average annual wages exceed $25,000: The reduction is determined by multiplying the full credit amount by a fraction: the numerator is the amount by which average annual wages exceed $25,000 and the denominator is $25,000. The amount calculated using the formula above is then subtracted from the full tax credit to determine the final credit the employer qualifies for. If the employer has both more than 10 FTEs and average annual wages over $25,000, the credit is determined by adding both reduction amounts together and subtracting that sum from the full cre
Related Questions
- How is the tax credit calculated for employers with more than 10 FTEs and/or average annual wages over $25,000?
- Are seasonal workers counted in determining the number of FTEs and the amount of average annual wages?
- How is the credit reduced if the number of FTEs exceeds 10 or average annual wages exceed $25,000?
