Tax Tuesdays: Top Small Business Tax Breaks

Author: Matthew May | Categories: Money Matters, Small Business, Taxes
top small business tax breaksSo what are some of the top small business tax breaks you should know this year? This question is asked constantly by all entrepreneurs. Why? Because every year brings a plethora of tax changes which makes staying up to date overwhelming – especially when you are already tasked with running a business. 
To make this task a little easier, its sometimes beneficial to look at tax breaks from the government’s perspective – because both the federal and state governments are willing to pay small businesses for certain economic boosters to the economy.
So, over the next three weeks, we are going to tackle the top areas of small business tax breaks:
  1. New jobs
  2. Training
  3. Research and development
Are you excited to take the credit for the good you have done? You should be!

New Jobs – Federal Credits

1. Do you plan to hire are least one person this year?
Then you can use the federal Work Opportunity Tax Credit. This credit gives you between $1,200 and $9,600 per hire for hiring someone in even one of the following categories:
  • Veterans
  • Needy Families Recipients
  • Food Stamp Recipients
  • People living in Empowerment Zones or Rural Renewal Counties
  • Ex-Felons (before you blow this one off, more than one entrepreneur we work with insist some of their best cold calling inside sales people have been ex-felons)
  • Supplemental Security Income Recipients
  • Summer Youth Employees
If you are curious about the exact amounts, check out the official website: http://www.doleta.gov/business/incentives/opptax/benefits.cfm
Pro tip – You have to be on the ball to capture the credit timely. Add these categories to your new hire paperwork and capture the information quickly because sometimes you only have 28 days from hire to claim the credit.
Even if you are not going to actively target these groups, you may stumble across someone you didn’t realize fell into one of the above categories.  Simply add a section to your new hire paperwork with checkboxes for your new employees to fill out – then be ready to claim your tax credit.

New Jobs – State Credits

Certain states provide additional tax credits for new jobs.  If you are adding jobs in a rural or underdeveloped part of the city, odds are, someone has passed a state tax credit that may benefit you.  A good source is the National Conference of State Legislators: http://www.ncsl.org/research/financial-services-and-commerce/job-creation-tax-credits.aspx
It is also worth a google search for “(insert your state here) jobs credit”.   But, to make your jobs a little easier, we went ahead and found a few for you. Take a look at the stats and links below to see what your state offers in benefits.
Find another credit or better site? Comment on the blog so we can crowdsource some best resources for other entrepreneurs!

New Jobs – State Credit Websites:

Alabama – http://revenue.alabama.gov/taxincentives/incentivesum.pdf
Alaska
Arizona – up to $9,000/ job (over 3 years) http://www.azcommerce.com/incentives/quality-jobs
Arkansas – http://www.dfa.arkansas.gov/offices/exciseTax/TaxCredits/Pages/BusinessIncentivesandTaxCreditPrograms.aspx
California – https://www.ftb.ca.gov/online/New_Employment_Credit_Reservation/FAQs.shtml
Colorado – http://www.advancecolorado.com/funding-incentives/incentives/job-growth-incentive-tax-credit
Connecticut – $500/month/job (over 3 years) http://www.ct.gov/ecd/lib/ecd/jet_revised_slipsheet_12-8-11.pdf
Delaware – http://revenue.delaware.gov/services/Business_Tax/FullBC.shtml
Florida – http://dor.myflorida.com/dor/taxes/corp_tax_incent.html
Georgia – up to $12,000/ job (over 3 years) http://www.georgia.org/competitive-advantages/tax-credits/job-credit/
Hawaii
Idaho
Illinois – up to $2,500/ job https://jobstaxcredit.illinois.gov/Default.aspx
Indiana
Iowa – $1,638/ job http://www.iowaeconomicdevelopment.com/Finance/NewJobs
Kansas – http://www.ksrevenue.org/taxcredits-busjob.html
Kentucky – http://thinkkentucky.com/kyedc/kybizince.aspx
Louisiana – http://www.opportunitylouisiana.com/page/quality-jobs
Maine
Maryland – up to $1,500/job http://business.maryland.gov/fund/programs-for-businesses/job-creation-tax-credit
Massachusetts – http://www.mass.gov/hed/economic/eohed/bd/econ-development/
Michigan
Minnesota- http://www.revenue.state.mn.us/individuals/individ_income/Pages/JOBZ_Subtraction_and_Credit.aspx
Mississippi – https://www.dor.ms.gov/info/rules/jobstaxcredit.html
Missouri – https://www.ded.mo.gov/BCS%20Programs/BCSProgramDetails.aspx?BCSProgramID=76
Montana
Nebraska – http://www.revenue.nebraska.gov/incentiv/775info/forms/fillin775n.pdf
Nevada
New Hampshire – http://www.nheconomy.com/Grow/incentives-and-tax-credits.aspx
New Jersey – http://www.state.nj.us/treasury/taxation/cbt-creditlist.shtml#NewJobs
New Mexico – http://www.tax.newmexico.gov/Tax-Professionals/employment-enhancement-tax-credits.aspx
New York – http://www.tax.ny.gov/pit/credits/jobs_retention.htm
North Carolina –  http://www.thrivenc.com/incentives/financial/tax-credits
North Dakota – http://www.nd.gov/tax/taxincentives/income/wordforcereccredit.html
Ohio – http://development.ohio.gov/bs/bs_jctc.htm
Oklahoma – http://okcommerce.gov/smart-move/incentives/
Oregon
Pennsylvania – $1,000/ job http://community.newpa.com/programs/job-creation-tax-credits-jctc/
Rhode Island – $2,400/ job http://www.dlt.ri.gov/bwc/taxcredits.htm#NewTax
South Carolina – http://southerncarolina.org/incentives.asp
South Dakota
Tennessee – http://www.tnecd.com/advantages/incentives-grants
Texas – http://comptroller.texas.gov/taxinfo/taxpubs/tx96_1196.pdf
Utah – http://business.utah.gov/programs/incentives/enterprise-zones/tax-credits/
Vermont – http://accd.vermont.gov/business/start/vegi#basic
Virginia – http://www.tax.virginia.gov/content/tax-credits
Washington
West Virginia
Wisconsin – https://www.revenue.wi.gov/faqs/ise/jobcrded.html
Wyoming
And just a note – Acuity does not provide these services, we just like helping entrepreneurs be financially sound.  We can however help to keep you organized and maintain highly accurate records so a tax professional can execute your tax strategy. So talk to your tax CPA, or if you need a professional, talk to one of our favorite clients, McMillan & Associates. They won’t even charge you unless they find you money. Besides – it is your money so don’t leave it on the table.

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