Small Firms May Claim Health Tax Credit For Dental, Vision

According to the Treasury Department, small businesses in the U.S will be able to take advantage of a new federal tax credit for dental and vision health benefits. To qualify the business must have less than 25 employees, have average wages less than $50,000 and must pay for at least 50% of employees’ premiums.

According to the Wall Street Journal, the credit will offset employer health-care premiums paid on and after Jan. 1, 2010, under health-care legislation signed in March by President Barack Obama.

Firms may claim state health tax credits and other subsidies without having their federal health-care tax credit reduced, said Treasury Assistant Secretary for Tax Policy Michael Mundaca in a conference call with reporters.

Some small-business advocates criticized the tax credit Monday as too limited in scope. Bill Rys, tax counsel for the National Federation of Independent Business, said more than two-thirds of small firms will be excluded because they are too large or don't currently offer health insurance.

Eligibility for the credit is limited to firms with fewer than 25 full-time workers, or the equivalent, and average wages of less than $50,000. To qualify, firms must pay at least 50% of worker health-insurance premiums.

Continue reading at WJS.com…

Treasury Weighs New Mortgage Subsidies: Sources

The U.S. Treasury Department may be about to give banks and investors millions of dollars in new incentives to modify mortgages. Check out the following article on the topic thanks to Reuters.com.

The Treasury Department is considering giving banks and investors billions of dollars in fresh incentives to modify troubled mortgages and save homeowners from foreclosure, sources familiar with official deliberations said.

Under one scenario, investors in second liens would receive a cash payment if they agree to ease the terms of troubled loans and accept a smaller return on their mortgage investment, the sources said.

During the height of the housing boom, some borrowers were able to buy a home with no downpayment by adding a second lien and many of those loans are now failing as the economy and housing market struggle.

Some on Wall Street will likely be angry if Washington doles out money to investors who hold the high-risk end of a home loan.

"Second-lien holders should get zero," said Bill Frey, president of Greenwich Financial Services in Greenwich, Connecticut. "Why should a second lien holder get anything if the first lien holder takes a loss? That's not the way the contracts work, that's not the way privatization works, that's not the way America works."

Officials also envision giving fresh subsidies to encourage 'short sales' in which the lender accepts a payment that does not cover the entire loan amount, according to the sources, who requested anonymity because they are not authorized to disclose details.

Fannie Mae and Freddie Mac, the mortgage finance companies, would administer the new program to resolve problems with second-liens under one plan being considered, they said.

A senior administration official declined to comment on Tuesday, but said the Treasury expected to unveil further details of its homeowner-aid program "soon."

The official said the Treasury Department is also considering ways it could resolve problems in the mortgage insurance industry battered by mounting foreclosure losses.

"We are aware of the difficulties in the industry and we are analyzing different options to deal with" those difficulties, the official said.

In February, President Barack Obama outlined a housing rescue plan that he said could move as many as 9 million homeowners into more-affordable loans by both refinancing and modifying their current mortgage.

Homeowners normally must settle all of a home's debts when they refinance a mortgage but a modified loan may hold the second lien in place.

A bulk of the Obama housing rescue plan involves modifying loans but officials have decided that they will try to ease those second lien payments in order to ease the costs of homeownership, the official said.

"Their debt overhang will be brought down," the official said. "We will have that program shortly."

Treasury Overpaid For Bank Stocks

From Breitbart.com:

A government watchdog group says the federal government overpaid for stocks and other assets from financial institutions under its $700 billion rescue program.

The chairwoman of the Congressional Oversight Panel for the bailout funds told the Senate Banking committee Thursday that Treasury in 2008 paid $254 billion and received assets worth about $176 billion.

The figures were reached by extrapolating the results of a study of 10 government transactions.

The Treasury by Jan. 23 had spent about $294 billion on more than 300 companies under the Troubled Asset Relief Program. In one bright spot, the inspector general in charge of reviewing the funds said the federal government has received more than $271 million in dividends from preferred shares obtained through the program.

NTEU Calls for IRS Mileage Rate Increase

With taxes prices increasing a record rates, the National Treasure Employees Union has called on the IRS to issue a mid year adjustment to the IRS’ 2008 standard mileage rate. I have included the full text of the release below, but if you would like to download it in Word format head over to NTEU.org.

NTEU Leader Seeks Mid-Year Adjustment From IRS in Mileage Reimbursement Rate

Washington, D.C.—In the wake of record—and still rising—gas prices, the head of the nation’s largest independent union of federal employees has called on the Internal Revenue Service (IRS) commissioner to make a substantive mid-year adjustment in the reimbursement rate for personal use of a vehicle for business reasons.

In a letter to IRS Commissioner Douglas Shulman—who has the policy authority to make such a mid-year adjustment, which would impact everyone in the country—President Colleen M. Kelley of the National Treasury Employees Union (NTEU) noted that record levels of gas prices are “placing an especially heavy burden on those who must travel to perform their work duties.”

These include a great many NTEU members employed by the IRS, as well as those at a number of financial regulatory bodies and other federal agencies. The NTEU leader made the request in the interest of all federal employees and others who use their personal vehicle for business travel.

The federal government’s reimbursement rate is set by the General Services Administration (GSA), but cannot exceed the amount set by the IRS as the maximum rate allowed as a business deduction. That rate currently is 50 ½ cents per mile.

“Given the extraordinary rise in gasoline prices,” currently averaging more than $4 a gallon across the nation, President Kelley wrote, “I would request that the IRS make a mid-year adjustment to the mileage reimbursement rate to accurately reflect the actual cost traveling employees pay.”

Pending legislation in the Senate would raise the rate to 70 cents per mile, she noted, but said that action by the IRS “would provide much more timely relief than depending on the slow pace of the legislative process.”

While unusual, this would not be the first time the IRS has made such a mid-year change in the rate; in 2005, then-IRS commissioner Mark Everson used his authority to honor a request from NTEU that the maximum rate be increased. Then, as now, gas prices were rising rapidly and with little prospect they would moderate.

“The needed relief his action provided to private and federal sector employees,” Kelley wrote of the Everson decision, “helped save many employees from having to pay work-related traveling expenses out of their own pockets.”

As the largest independent federal union, NTEU represents 150,000 employees in 31 agencies and departments.