Talk to Your Clients Now About HIRE and PPACA

If they haven’t already, your clients will soon hit you with questions about how the recently enacted federal HIRE and Affordable Care laws will affect them. Are you ready to answer and wow them with your service?

May 17, 2010
Sponsored by CPE Link

by Sue Anderson, Program Director, CPE Link

Business has been tough lately for accounting professionals as well as for their clients. Now come two federal laws that present new opportunities in the economic downturn to increase client loyalty when it matters most. In March, President Obama signed into law the HIRE Act and the Affordable Care Act — two laws with profound tax implications that clients need to understand. Acting quickly and proactively to help clients navigate these new laws can give accounting professionals and firms a competitive advantage. Clients are likely to love you for anticipating their questions and taking the initiative to provide answers.

Make the Most of HIRE

The Hiring Incentives to Restore Employment (HIRE) Act encourages businesses to hire and retain employees. It does this with two incentives: a payroll tax holiday for hiring and a tax credit for retaining. Will the provisions of the HIRE act be sufficient to spur employment? Every client will be asking questions and making their own determinations. You can assist them.

HIRE exempts employers from paying their 6.2 percent share of the Social Security payroll tax on new hires who meet specific criteria. Payroll taxes are a sore point for many employers, and this provision presents an excellent opportunity to help clients ease the pain and improve their cash flow immediately. As a bonus, businesses may also get up to a $1,000 tax credit for every qualified new hire that they retain. Of course, there are specific requirements that must be met, so now is a good time to consult with clients about how they can minimize their 2010 and 201l tax liability. Claiming the tax credit requires an audit trail of documentation. By advising clients now, you can save them costly mistakes and oversights.

Accounting professionals have a window of opportunity right now to help clients:

  • Understand the two employment incentives
  • Know whether they qualify
  • Obtain the maximum per-employee credit for 2010
  • Understand when to elect out of using the HIRE benefits
  • Report the HIRE-tax forgiveness properly

Demystify the Affordable Care Act

The second important piece of legislation enacted in March, the Patient Protection and Affordable Care Act, is more complex and presents an even greater opportunity for accounting and tax professionals to provide superior service to clients.

This act aims to improve the access of Americans to quality, affordable healthcare. Clients are eager to understand how the law will affect their tax situation and their bottom line. In brief, the law encourages small businesses to purchase health insurance for employees by providing tax credits. Businesses with fewer than 25 full-time equivalent employees and average annual wages of less than $50,000 are eligible for a credit if they contribute at least 50 percent of the premium cost. Under this Act, an estimated 4 million small businesses could qualify for such a tax credit. Will the credit be sufficient to enable your clients to start or continue providing health insurance benefits to their employees? Since the credits begin in 2010, with increases effective in 2014, now is a good time to start helping clients make the analysis. There are also many other ins and outs of the Act that clients will appreciate your assistance in interpreting. These include:

  • Provisions for individuals, as well as businesses;
  • Benefits for children under 27 years of age;
  • Additional Medicare tax for high income taxpayers and how to mitigate or avoid an increase;
  • Penalties for failing to carry health insurance;
  • Participation in health insurance exchanges;
  • Eligibility for tax credits and cost-sharing reductions and much more.

Get Up to Speed Quickly

These new laws have been in the news and on the minds of clients, so tax professionals need to lose no time in understanding them and their ramifications. “How embarrassing would it be to get a question from a client that you can’t answer,” cautions Vern Hoven, CPA, EA and award-winning tax update instructor.

A convenient and cost effective way to get up to speed quickly on the new laws is through online training. “With online webcasts, you can learn what you need to know to start helping clients in three hours or less,” says Hoven.

CPE Link is offering several live webcasts this month and through the summer about the HIRE Act and the Patient Protection and Affordable Care Acts. Both are taught by Vern Hoven. Webcast attendees love Vern. One recently summed up the effectiveness of Vern’s courses: “I retain more from your lectures, than I have retained from anyone else over the years." Another said, “Vern helps make sense out of the crazy ideas that Congress puts into law and the policies the [Internal Revenue Service] IRS puts into effect.”

You can find a schedule of live webcasts on the HIRE and Affordable Care Act on the CPE Link website.

Have you thought about …

  • Sending your contacts a special issue newsletter or e-mail blast about the new laws and their tax changes?
  • Offering workshops for client CFOs, treasurers and HR directors?
  • Inviting key clients to a breakfast or lunchtime teleconference on the new laws?