Allowance time! The federal government has put out its budget proposal for FY2016. And there’s plenty for Finance tucked among the funding requests.
Take a look at eight provisions with the potential for a major impact on you and your staffers, from Accounts Payable to Payroll to Benefits and beyond.
Some help, some hurt
Check out what could be coming your way:
1. Higher Section 179 expensing limits. Next year could be a good one to make some major purchases at your company. If this proposal passes, you’d enjoy a higher — much higher — Section 179 expensing option. The new proposed limit: $1 million. That’s a huge jump from the $25,000 you’re held to now.
2. Permanent Research Tax Credit. Just before this expired at the end of 2014, many thought it would be saved at the last minute. No such luck. If this proposal survives, this key tax credit would be extended permanently.
3. Other tax credits made permanent. The budget proposal looks to make some other tax credits permanent, such as:
- The Work Opportunity Tax Credit
- The Production Tax Credit, and
- The New Markets Tax Credit.
4. Expanded Section 45R credit. If this part of the budget passes, the credit for small insurers offering employees health insurance would jump to businesses with up to 50 full-time equivalent (FTE) employees (compared to 25 currently) with a phase-out between 20 and 50 employees (it’s 10-20 now).
5. Lower corporate tax rate. The Taxman would take a smaller bite out of your profits if this proposal passes. The president is asking for the corporate tax rate to be reduced to 28%, with a 25% effective rate for domestic manufacturing. You might not want to hold your breath on this one though – this initiative hasn’t gotten anywhere recently.
Not every proposed change will put a smile on your face. Some could cost your company more money in 2016.
6. Greater retirement plan eligibility. You may soon find yourself having to include more folks in your company’s retirement plan. If this provision passes, any employee who works 500 hours or more for you for the past three years would be eligible for your retirement plan.
7. Paid FMLA leave. You know how costly Family and Medical Leave Act (FMLA) leave can be already … and you don’t even have to pay people for it! But that may soon come to an end, at least in certain states. The FY 2016 budget sets aside $2 billion for five states to launch pilot paid-leave programs. No word on which states would step up just yet.
8. Stepped-up Department of Labor (DOL) enforcement. No better time than now to make sure your company’s compliance is on-point. The DOL is getting billions to boost its enforcement efforts. Watch everything from worker classification to overtime pay and eligibility.
Congress still has to approve the budget and may make some changes before it’s final. We’ll keep you posted.
Info: For a copy of the FY2016 budget proposal, click www.white house.gov/sites/ default/files/omb/budget/fy2016/assets/budget.pdf