Time to get in line for small business tax credits

Small Business
Small Towns

By Eric Galatas, Public News Service (Nebraska)

Nebraska businesses with no more than five employees now can apply for up to $20,000 in tax credits.

Johnathan Hladik, policy director at the Center for Rural Affairs, said because funds are limited, now is the time to get in line for the Nebraska Advantage Microenterprise Tax Credit.

He pointed out the credit also is available to owner/operators and entrepreneurs who plan to invest in their business in a wide range of ways.

"That includes purchasing or leasing equipment, such as machinery, or computers, or office equipment for repairs and maintenance to your property," Hladik outlined. "It will even help you for new-employee health insurance coverage, or increasing compensation to existing employees."

The credit is refundable, which means businesses will be reimbursed for 20% of money invested even if they don't end up owing taxes.

Hladik noted the application process can take time, and encouraged entrepreneurs to contact the Center if they need help.

This year's allocation for the program is a total of $2 million, and starting August 27, the tax credit's lifetime limit will increase from $10,000 to $20,000.

Hladik contended the credit can boost rural economies by helping Main Street mom-and-pop businesses recover from the pandemic's economic fallout.

"And particularly tailored to help those businesses grow their county," Hladik observed. "We want to see rural economic development. We want to see job growth in those rural areas. We know, historically and statistically, a lot of that does come from entrepreneurship and a lot of that does come from microenterprises."

Many businesses had to put off investments during the economic downturn in 2020.

Hladik argued businesses that made zero investments last year are well positioned to qualify for the credit on investments made this year.

"And that means they're ready to make those investments now," Hladik asserted. "So it's a perfect time to apply for this, because you're going to get a 20% credit on those investments you make to build your business."

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