Tax News

CCH (cch.taxgroup.com) reports:

The IRS has highlighted two recent changes to the credit for the portion of employer Social Security taxes paid with respect to employee cash tips. Although the Fair Minimum Wage Act of 2007 (P.L. 110-28) increased the minimum wage, the Small Business and Work Opportunity Tax Act of 2007 (P.L. 110-28) provides that employers operating food and beverage establishments should continue to compute the amount of the Code Sec. 45B tip credit based on the federal minimum wage as in effect on January 1, 2007, i.e., $5.15 per hour. Additionally, effective for tax years beginning after December 31, 2006, the credit can offset the alternative minimum tax (AMT). This offset was previously applicable only against the regular tax.
IR-2007-155, 2007FED ¶46,620
Other References:
Code Sec. 45B
CCH Reference - 2007FED ¶4460.01
CCH Reference - 2007FED ¶4460.021
Tax Research Consultant
CCH Reference - TRC BUSEXP: 54,400