Minimum Wage Tax Credit Can Help Businesses Save Money
Over the next three years, businesses in New York state will see a rise in the minimum wage.
On December 31, 2013, New York's minimum wage increased from $7.25 to $8.00 an hour, and is scheduled to increase to $8.75 in 2014 and $9.00 in 2015.
Businesses may be able to offset the additional costs of a higher minimum wage by applying for a minimum wage reimbursement credit.
Created to aid businesses affected by the increase in wages, the Minimum Wage Reimbursement Credit is available to any business that employs students ages 16 to 19. For 2014, businesses that apply receive a reimbursement credit from the state to compensate for the $0.75 per hour increase for any eligible employee. When the minimum wage increases in the years to follow, the reimbursement credit will increase accordingly.
In order to receive the credit, businesses are required to provide documentation that the worker is in fact a student; a student ID card or a course schedule will typically be adequate proof, as will other supporting documents. For a list of acceptable documentation and more information on the tax credit rate, visit the Minimum Wage Reimbursement Credit section on the NYS Department of Taxation and Finance website.
Applying for tax credits like this one may seem like extra paperwork for some employers, with the assumption that it will take time away from normal business activities. However, billions of dollars in tax credits go unclaimed each year due to companies not knowing they qualified, or deciding that they don't have the experience or the time to handle the paperwork involved. There are services available that help businesses complete and submit all the forms necessary to receive breaks such as the New York State Minimum Wage Reimbursement Credit. Consider working with a professional recordkeeper who can help you complete all the necessary forms, submit information on time, and provide guidance. Learn more about how Paychex Tax Credit Service can assist your business with the Minimum Wage Tax Credit, as well as other applicable tax credit opportunities.