President Obama signed into law the Three Percent Withholding Repeal and Job Creation Act (H.R. 674) on November 21, 2011. This legislation was sent to the President the prior week, upon approval from the House.
The act eliminates the requirement that federal, state, and local governments withhold 3 percent of nearly all of their contract payments to any person for services or property. This withholding requirement was scheduled to take effect January 1, 2013.
In addition, this act included tax credits for employers who hire military veterans. These credits are available for qualified individuals who commence employment after November 21, 2011, but before December 31, 2012.
Contact your Schneider Downs representative if you have any questions on this new legislation.
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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person any tax-related matter.