07/23/2008
Employers paying workers called to active duty military service may claim credit
Small business owners with fewer than 50 employees are now eligible for a tax break if they continue to pay employees called to active duty in the U.S. military. The tax credit was included in the recently passed H.R. 6081, the Heroes Earnings Assistance and Relief Tax Act of 2008.
The legislation, which was passed by the House and Senate in May and signed into law by the president in June, allows small business owners with fewer than 50 employees to claim a tax credit of 20 percent of wage differential payments as long as they continue to pay reservists some or all of their former compensation and the payments do not exceed $20,000. The credit applies to payments made after June 17, 2008, and before Jan. 1, 2010.
NFIB supports this tax credit, as it is difficult for small business owners to deal with not only losing an employee when they are called to service, but also because it can be burdensome to continue to pay an absent employee. While employers are not required to pay employees during military leave, this bill will provide an incentive for small businesses to do so.
