Funds for Small Business

The American Recovery and Reinvestment Act of 2009 (Recovery Act) signed into law by President Obama on February 17, 2009 includes more than just tax changes. The law also provides $730 million to the Small Business Administration (SBA) and makes changes to the agency’s lending and investment programs so that they can reach more small businesses that need help. The funding includes:

• $375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans
• $255 million for a new loan program to help small businesses meet existing debt payments
• $30 million for expanding SBA’s Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders
• $20 million for technology systems to streamline SBA’s lending and oversight processes
• $15 million for expanding SBA’s Surety Bond Guarantee program
• $25 million for staffing up to meet demands for new programs
• $10 million for the Office of Inspector General

For more information from the SBA, visit: http://www.sba.gov/recovery/index.html

California FTB urges caution when choosing a tax preparer

The California Franchise Tax Board (FTB) issued a press release last week urging taxpayer caution when choosing a tax preparer. "Taxpayers should realize they are ultimately held accountable for the information on their tax return even if they pay someone else to prepare it. The majority of tax professionals are honest and provide a quality service. Unfortunately, there are dishonest tax preparers who may inflate expenses and deductions, claim unallowable credits, or take excessive exemptions and leave their clients accountable." For the complete press release, please visit: http://www.ftb.ca.gov/aboutFTB/press/2009/09_11.shtml

How will the new CA budget affect you?

An online calculator is available to estimate how the new California budget will affect your household. To use the calculator, and for information on the new budget, visit the website for The Sacramento Bee at: http://www.sacbee.com/1098/story/1627728.html

California Tax Credit for New Home Purchases

A new California tax credit is available for new home purchases between March 1, 2009 and February 28, 2010. The credit applies only to homes that have never been occupied. The tax credit is equal to 5% of the purchase price, up to a maximum credit of $10,000. Qualifying taxpayers need to act fast, because the credit is available on a first-come, first-served basis until the $100 million budgeted for the credit has been used up. Within one week of the close of escrow, certain forms must be completed by both the buyer and seller, and faxed to the Franchise Tax Board. Taxpayers who are allocated a portion of this credit will claim the credit on their tax returns starting with the year the home was purchased. For more information, including how to fax in the application to be allocated the credit, please visit the FTB website here.

More Info on New COBRA Rules

The US Department of Labor (DOL) has published guidance and resources on the new law, which provides for a 65% reduction in COBRA premiums for certain eligible individuals for up to 9 months. For FAQs for employers, employees, fact sheets, and other resources from the DOL, please visit: http://www.dol.gov/ebsa/COBRA.html

New Rule for COBRA Health Insurance

The 2009 Tax Act made changes to the health benefit provisions of COBRA. Eligible former employees who were enrolled in their employer's health plan when they lost their job need only pay 35% of the cost of COBRA coverage, while employers are entitled to a credit for the other 65% of the COBRA cost on their payroll tax return. The IRS posted guidance, including questions and answers for employers, at www.irs.gov/newsroom/article/0,,id=204505,00.html.