New Cafeteria Plans- A new Simple Cafeteria Plan is available to eligible small employers (100 or fewer average number of employees during either of the two preceding years). A Simple Cafeteria Plan and the benefits it provides are treated as meeting the nondiscrimination rules for cafeteria plans if the plan satisfies certain minimum eligibility, participation and contribution requirements.
Cancelation of Debt- Business can no longer defer the taxability of cancelation of debt over 5 years.
New Hire Retention Credit- For each of the taxpayer’s retained workers, the general business credit is increased by the lesser of: [HIRE Act §102(a)]
- $1,000 or
- 6.2% of the wages paid to each retained worker during the 52-consecutive-week-period beginning on the worker’s hire date. The credit is only available for wages paid to workers who began employment any time from 2/4/10–12/31/10 and who worked for at least 52 consecutive weeks. So, for calendar year taxpayers, it can be claimed in 2011 only.
Changes in Built In Gains On Corporations- A C corporation that elects S corporation status is taxed at the highest corporate rate (currently 35%) on built-in gains recognized during the recognition period, which is generally the 10-year period starting on the first day of the first year of S status. For 2011, the built-in gain tax is not imposed if at least five years in the recognition period ended before 2011.