Tax Extenders

Many pro-growth tax provisions have allowed independent grocers to hire more workers, invest in new equipment, and open new stores. In a last minute deal to avert the fiscal cliff, Congress temporarily extended many of these provisions which include:

Work Opportunity Tax Credit (WOTC)-was extended and made retroactive for 2012 and 2013. WOTC allows businesses to claim a tax credit equal to 40 percent of the first $6,000 of wages paid to new hires in certain targeted groups such as: members of families receiving benefits under the Temporary Assistance to Needy Families (TANF) Program, qualified ex-felons, designated community residents, vocational rehabilitation referrals, certain summer youth employees, qualified food and nutrition recipients, qualified SSI recipients, and long-term family assistance recipients.

New Markets Tax Credit (NMTC)-was extended and made retroactive for  2012 and 2013. NMTC enables individuals and businesses that make private investments in low income communities a 39 percent tax credit spread over 7 years with a maximum annual amount of $3.5 billion a year. NMTC are an important resource for healthy food financing initiative projects that a number of NGA members are engaged in.

15-Year Straight-Line Cost Recovery for Qualified Leasehold Improvements-was extended and made retroactive for 2012 and 2013, the 15-year cost recovery period for qualified leasehold, restaurant and retail improvements/new buildings which are established prior January 1, 2014.

Bonus Depreciation-extended  the current 50 percent bonus depreciation provision for qualifying property established before January 1, 2014.

Section 179 Deduction-extends the Section 179 Deduction and increases the maximum amount to $500,000 and phase-out threshold to $2 million in 2012 and 2013. The provision also enables a taxpayer to expense up to $250,000 of the cost of qualified leasehold improvement property until December 31, 2013.

Charitable Deduction for Contributions of Food Inventory-extended the current enhanced deduction for the contributions of food inventory for two years.

Resources

Work Opportunity Tax Credit

New Markets Tax Credit Program

 





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