Providence Business News

today to start getting tax credits on your training!

 

Cumberland firm meets deadline with program for tax credits

By Erin M. Piorek
Staff Writer

Working with TracTax, his company's new software package is Tom Busch, president of Phase II Technologies.

A new software package designed to help Rhode Island employers take advantage of the new jobs training tax credits in the state is on the market just in time to meet fast-approaching tax deadlines.

TracTax, a software program exclusively for Rhode Island businesses, was developed last year by Cumberland-based The ProfitPoint Group, Inc. to save employers time and money processing claims for jobs training tax credits.

The program is designed to calculate essential tax credit information, prepare and report all state-required documents, summarize the training events of the year, and project the company's available credit for the following year. Users input employee and course information, including annual income, amount of time in training, and the cost of training.
  

To start, The ProfitPoint Group, Inc. is targeting companies that participated in training last year, primarily manufacturing companies. But the program is designed for software companies and accountants involved in employee training as well.

It is an easy to use, "cookbook approach" to managing and preparing the information required by the state to collect jobs training tax credits, according to Phase II president Tom Busch.

"It enables the training company to get the credit they deserve quickly, easily and cost-efficiently, and it encourages their commitment to training," Busch said. "That incentive perpetuates training, which benefits the employee, the recipient. In turn, it promotes business and employment opportunities within the state."

The new jobs training tax credit allows eligible businesses to claim credits for reasonable expenses incurred for training or retraining qualifying employees. Training must occur in-state, unless it is unavailable in Rhode Island or less expensive out-of-state. The credit is based on a maximum credit amount of $5,000 per employee in any three year period. The credit is equal to 50 percent of qualifying expenses incurred, with one half of the credit allowed in the year the expense is paid, and the remaining half allowed in the following year.

Qualifying employees are defined as employees working at least 30 hours per week and earning at least 150 percent of the Rhode Island minimum wage currently or upon completion of the program, according to the "State of Rhode Island Tax Credits Summary," a report compiled by Sasiveri, Kimball & McNamee, L.L.P.

Since the TracTax program became available just last month, clients are using the system through The ProfitPoint Group employees and will pay the company a percentage of the tax credits claimed. The ProfitPoint Group said it has two customers, with a third expressing interest in the system.

For companies buying the software, prices range from $499 to $3,500, depending on how sophisticated a system the company is interested in.

Droitcour Corp., a precision screw machine job shop in Warwick, has been working with Busch and his company for about a month and a half, sending data on a quarterly basis.

The company started training its employees last month in blueprint reading, geometric blueprint measuring, and English as a Second Language, and plans to do managerial leadership training and inner-company training as well, according to Droitcour controller Mike Wilkinson.

TracTax has saved the company hours of research time, and money it would have otherwise spent training a part-time employee to do the tax credit processing, along with providing benefits for that employee, Wilkinson said.

"It's cheaper to pay Busch's company a percentage of the tax credit," Wilkinson said. "Plus, he knows what the state wants so he's going to do it right the first time."

Also included in the program is an ancillary reporting piece, which enables a company to keep track of the courses each employee has participated in, the type of training undergone, and the costs associated with that. Companies can use the reporting piece for ISO 9000 certification, according to Busch.
  

"So it's giving us some added benefits that we hadn't anticipated," Busch said.

To keep up with changes in the tax code and insure compliance with state regulations, The ProfitPoint Group has met with the state Economic Development Corp., the regional employment and training boards, the Division of Taxation, and the Private Industry Council.

Busch met with Paul Harden, assistant director for training policy at the EDC, who made some format suggestions to make the program more user-friendly.

"It does the job," Harden said. "It's one of the options."

It's also the most elaborate program of its kind in the state "from what I've seen," he said, but employers do not need the program to get the training tax credits.

The EDC does not endorse the new TracTax software, but if an employer was to inquire about the availability of such a program, TracTax would be listed as an option, Harden said.

TracTax is also audit-proof, according to Busch.

And that's good news for Bob Habershaw, chief financial officer at William H. Harris, Inc. in Warwick, who has had his fill of audits.

"It was good for me because I had lost an employee, I had been through five audits, and I had lost my key person," Habershaw said of TracTax. "It's saving me time, so obviously it's saving me money."

William H. Harris, Inc., a fur finishing and design company, won a $22,500 job training grant last year from the Rhode Island Human Resource Investment Council, and the company spent an additional $48,000 in training costs. The new tax credits will enable the company to claim some of those dollars in credit.

Last month, The ProfitPoint Group was invited to conduct a brief demonstration of its product for 35 representatives from manufacturing companies in the state that share a Human Resource Investment Council grant for high-powered manufacturing job training programs.

"We're giving (the manufacturers) exposure to it ... it's not anything we're endorsing," said Ed Canner of the Providence/Cranston Regional Employment & Training Board Inc., the organization that sponsored the workshop.

It's too early to tell whether the product will be a success, but already, at least a handful of Rhode Islanders believe it will enable companies to better manage employee training.

"These people did a lot of homework," Canner said of Busch and The ProfitPoint Group.

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