3. Property Type Property with MACRS life of 20 years or less Computer software Qualified leasehold improvements Water utility property
4. Original Use Original use of property must begin with the taxpayer – NO USED PROPERTY Original use must begin after: 12/31/2007 for 50% bonus 9/8/2010 for 100% bonus
5. Placed In Service Dates: Property must be placed in service: between 1/1/08 and 12/31/12 to qualify for 50% bonus between 9/9/2010 and 12/31/2011 for 100% bonus with some exceptions – written binding contract for purchase cannot be in effect before earliest date
6. Self-constructed Property Either “manufactured, constructed, or produced” by the taxpayer for their own use or, “manufactured, constructed or produced for the taxpayer by another person under a written binding contract”
7. Acquisition date for self-constructed property: Physical work of a significant nature begins Safe Harbor Significant physical work begins Accrual basis – when 10% of total cost of property is incurred Cash basis – when 10% of total cost of property is paid this doesn’t include cost of land or preliminary activities such as planning, designing or researching
8. Considerations: Other tax attributes may be affected by claiming bonus depreciation DPAD Foreign tax credits, state credits and general business credits State Considerations: Many disallow bonus – Tennessee for example Loss of state NOLs
10. Overview: Available to small employers that provide health insurance coverage to employees Includes taxable employers and 501(c)(3) organizations 2010 – maximum credit is: 35% of premiums paid for taxable employers 25% of premiums paid for tax-exempt employers
11. Eligible Businesses: Fewer than 25 full-time equivalent employees (FTEs) Owners and partners generally don’t count Employees must earn an average of less than $50,000 per FTE Employer must maintain a “qualifying arrangement” for health insurance coverage
12. Qualifying Arrangement: Employer pays premiums for each employee enrolled in health care coverage Amount paid for employees must be a uniform percentage (not less than 50%) Includes: medical care – long term care, nursing home care HMOs Dental or vision plans
13. Premiums Included: Lesser of: Actual premiums paid by employer or, Average premium calculated by the Department of Health and Human Services for the small group market in each state. TN - $4,611, $10,369 GA - $4,612, $10,548
14. Credit: Gradual Phase Out: FTEs exceed 10 Average Annual Wages exceed $25,000 Transition Relief: Employers who pay 50% of premiums for single coverage will meet the uniformity requirement regardless of whether they pay the same percentage for each employee
