Tax Credit

It wasn't the Devil that made M. Night Shyamalan do it. It was the Harrisburg budget impasse. With uncertainty about whether Pennsylvania's film tax credit will be authorized in the state budget - now in Day 56 of limbo - the supernatural thriller (which Shyamalan wrote and is producing) has relocated production to Toronto. Though the filmmaker has shot eight of his nine features in the Philadelphia region - for an estimated economic impact of $375 million, according to the local film office - his backers couldn't wait any longer for legislators to approve the incentive that brings filmmaking and jobs to the state.

IN HIS LETTER ("Unearned tax credit"), Vincent P.A. Benedict of Collegeville says he is dreading April 15 because he will be sending a check to the IRS. I am a single mother who has put herself through almost 10 years of college while working and supporting her family. I am so looking forward to the day when I will be making enough money that I actually "owe" money to the IRS. I will never forget the lean years when that Earned Income Tax Credit was there to help pay my gas and electric bills and help me to take my children to the Jersey shore for the weekend.

City Council yesterday called on state congressional leaders to help increase the number of working families benefiting from the federal Earned Income Tax Credit so they can climb out of poverty. In a resolution sponsored by Councilwoman Marian B. Tasco and unanimously approved by Council, city officials request that the IRS require employers to include tax-credit information when mailing federal W-2 tax forms to their employees. The tax credit offsets income taxes and provides refunds to families with two or more children who earn less than $34,692 a year.

George W. Bush and Al Gore are offering both tax credits and tax deductions. What's the difference, and how do they work? Tax credits directly lower your tax bill. Broadly speaking, if you have $10,000 in taxable income, you're in the 15 percent federal tax bracket and owe $1,500 in taxes. For every child you have, you're entitled to a $500 tax credit. Let's say you have one kid: That $1,500 tax bill would be lowered to $1,000. Tax credits come in two varieties, refundable and nonrefundable.

City Council signaled yesterday that Mayor Nutter would have a difficult time deep-sixing already approved wage-tax cuts for the working poor to help pay for his proposed business-tax cuts. At least five Council members said in a budget hearing yesterday that they flat-out opposed or were deeply skeptical of calls to eliminate the so-called David Cohen tax credit, which was championed by the former city councilman, who died two years ago. "With an acknowledged rate of 25 percent of our citizens in poverty, I'm not satisfied that we're presenting a budget where we are more aggressive on our business-tax cuts," said Councilwoman Maria Qui?ones Sanchez.

For 20 years now, Republicans and Democrats alike have supported the earned-income tax credit as a way to benefit Americans who "work hard and play by the rules. " By allowing working, poor Americans to keep more of what they earn, the tax credit provided an incentive for people to get off welfare - and to work at the low-paying jobs that are easiest for them to get. The tax credit program recognized and tried to alleviate an economic reality: Minimum wage jobs without benefits simply do not provide enough money to keep a family out of poverty.

It was meant to be a different kind of federal program - one that would help struggling families without fostering dependency and inviting abuse. Called the Earned Income Tax Credit (EITC), the program uses the tax system to pay low-income families up to $2,528 a year to supplement their earnings. The goal: Reward the working poor and encourage them to stay off welfare. But with one in five American families now getting EITC payments, fraud is costing taxpayers $1 billion a year.

The extension of the federal wind-power tax credit as part of the fiscal cliff package was hailed as a victory Wednesday by renewable power advocates. But a Bucks County wind-turbine manufacturer, where much of the workforce was furloughed in September because of a slowdown in orders, is unlikely to ramp up production any time soon because of the last-minute Congressional rescue of the tax credit. "I think it will take a little while for this to work its way to the manufacturing sector, but it will be a stimulus," said David J. Rosenberg, the vice president of marketing for Gamesa USA, the Spanish wind-turbine manufacturer with U.S. headquarters in Langhorne.

With child-tax-credit checks to be sent within days to millions of middle- and upper-income taxpayers, Senate Republicans urged GOP leaders in the House yesterday to compromise this week on an expanded child tax credit that would benefit low-income families as well. House leaders expressed little hope of acting on the $50 billion proposal before they recess this weekend for a month. At stake are checks of up to $400 per child for about 6.5 million families with incomes from $10,500 to $26,625, not enough to pay income taxes.

Congressional Republicans are moving to scale back a major tax benefit for the working poor, even as they strive to expand tax breaks for wealthy investors, businesses and middle-class parents. Called the Earned Income Tax Credit, the $20 billion-a-year program uses the tax system to pay low-income working families with children up to $2,528 a year. Under current law, the maximum benefit for a family with two or more children is scheduled to rise to $4,320 by 2002. A Senate plan released Friday would roll that back to $3,888.

With a touch of theatrics and an eye toward his reelection, Gov. Christie used Monday's tax deadline to drop a revived tax-credit plan on the Democrats who control the Legislature. "Everybody who works and makes up to $400,000 would be getting a tax cut under this plan," the Republican governor announced. The plan would not cut property taxes for New Jerseyans, who have the nation's highest average property-tax bill. Instead, similar to a plan Christie unsuccessfully pushed last year, it links a 10 percent reduction in income taxes to how much a homeowner pays in property taxes, and restores Christie's previous cut in a tax credit for the working poor.

EXCUSE ME for bringing up a bad subject, but Monday is when you pay Uncle Sam what you owe in taxes. And tax experts say too many entrepreneurs often leave legitimate small-business tax deductions on the table. According to online publication Small Business Trends , there are 10 key deductions entrepreneurs should not overlook. 1. Health Care Tax Credit If you provide insurance to your workers under ObamaCare, you may be eligible to claim a tax credit of up to 35 percent, if certain criteria are met. 2. Business Use of Personal Car Use your personal vehicle for business purposes?

A former IRS worker faces more than a dozen years in prison after a jury convicted her Wednesday of masterminding a scheme to collect thousands of dollars in refunds by filing bogus claims for tax credits. The jurors deliberated less than a day before finding Patricia Fountain, 35, guilty of conspiracy and tax fraud charges. They also convicted her boyfriend, Larry Ishmael, 40, and a third conspirator, Calvin Johnson Jr., on similar counts. All are Philadelphia residents. The weeklong trial before U.S. District Judge Stewart Dalzell showcased how an IRS insider used her own experience with the agency to exploit its vulnerabilities and rip it off for nearly five years.

There are many things to call Apple Inc. Maker of the iPhone, iPad, and other must-have products. The world's most innovative company, and the world's most valuable company (at times). Allow me to add to the list: "Major buyer of Pennsylvania tax credits. " The Cupertino, Calif.-based technology Goliath may have more cash than investor David Einhorn believes is prudent, but Apple isn't foolish when comes to taxes. Apple apparently is trying to reduce its tax liability in Pennsylvania by buying up tax credits from other companies here.

The extension of the federal wind-power tax credit as part of the fiscal cliff package was hailed as a victory Wednesday by renewable power advocates. But a Bucks County wind-turbine manufacturer, where much of the workforce was furloughed in September because of a slowdown in orders, is unlikely to ramp up production any time soon because of the last-minute congressional rescue of the tax credit. "I think it will take a little while for this to work its way to the manufacturing sector, but it will be a stimulus," said David J. Rosenberg, the vice president of marketing for Gamesa USA, the Spanish wind-turbine manufacturer with U.S. headquarters in Langhorne.

The extension of the federal wind-power tax credit as part of the fiscal cliff package was hailed as a victory Wednesday by renewable power advocates. But a Bucks County wind-turbine manufacturer, where much of the workforce was furloughed in September because of a slowdown in orders, is unlikely to ramp up production any time soon because of the last-minute Congressional rescue of the tax credit. "I think it will take a little while for this to work its way to the manufacturing sector, but it will be a stimulus," said David J. Rosenberg, the vice president of marketing for Gamesa USA, the Spanish wind-turbine manufacturer with U.S. headquarters in Langhorne.

TRENTON - The Assembly approved a slew of job-creation bills during its final voting session of the year. Republicans, the minority in both chambers, asked Democrats to consider working with them before pushing through the bills. "This bill has been vetoed by the governor already," said Minority Leader Jon Bramnick (R., Union). "Work with the governor instead of posting bills that have already been vetoed. " That's what Democrats are doing, said Majority Leader Lou Greenwald (D., Camden)

The latest reports on wind-generated electricity in Pennsylvania and New Jersey equate the clean-air impact to pulling thousands of cars off the road. That's certainly enough vehicles to assemble one impressive motorcade to Washington and lobby for congressional action on extending tax credits viewed as critical to expanding wind power. The smart, 20-year policy of providing a 2.2-cent-per-kilowatt-hour tax credit for electricity produced by large-scale wind turbines faces a year-end expiration deadline.

City Councilman James Kenney is to introduce legislation Thursday that would give a tax credit to employers who provide health-care benefits to same-sex partners, saying his bill would make Philadelphia, already a popular city for gays and lesbians to live, even more so. "A lot of changes we are making will make Philadelphia more attractive to LGBT people and make them want to settle here," Kenney said. "They are good job creators, good taxpayers, and good employees. " His legislation also would guarantee partners of lesbian, gay, bisexual, and transgender people the right to visit their loved ones in hospitals and make medical decisions for them.

HERE'S A LOOK at where the two presidential candidates stand on job creation: PRESIDENT OBAMA: Wants to spend $75 billion to build roads, bridges and schools, which would create construction jobs, and another $35 billion for states to keep teachers, police and firefighters employed. He would create a $4,000 tax credit for companies that hire workers who have been unemployed for at least six months, and would invest $2 billion in community colleges while seeking to create partnerships between the colleges and employers to train 2 million workers.