There are 31.7 million small businesses in the U.S. If you’re a small business owner, there’s an important thing to know.
Did you know there are small business tax credits available? Yes, as a small business owner, you’re entitled to claim tax credits. These tax credits can lower your tax burden.
You need to take advantage of these incentives. Read on to learn about some of the most overlooked small business tax credits. This guide will explain how they work.
Credit for Small Employer Health Insurance Premiums
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Thinking of providing your employees with health insurance coverage? You can get a tax credit for this. The IRS states that this tax credit can be up to 50% of the premiums you paid for coverage.
You must meet the criteria to be eligible for this small business tax credit. You must have fewer than 25 full-time or equivalent employees.
Your coverage should be from the SHOP Marketplace. The fourth criterion concerns wage per full-time employee. The average annual wages for the tax year need to be less than $56,000 to qualify.
Employer Credit for Paid Family and Medical Leave
Does your small business offer at least two weeks of paid family and medical leave? You might be able to qualify for the Family Leave Act Tax Credit.
To qualify, your business must have a written policy that states full-time employees can take a leave from work. The policy should also state the two weeks are paid.
This credit ranges from 12.5% to 25% of the wages you pay qualifying employees. If you plan on claiming this specific tax credit, you’ll need to keep one thing in mind. The credit you receive will offset any small business tax deductions you take for employee wages.
Work Opportunity Credit
The Work Opportunity Credit is one of the tax credits for small business owners who seek to hire underserved populations.
Eligible workers include veterans, ex-felons, and individuals who receive SSI. The credits you receive are based on the wages you pay the employees. Look for Form 5884 to learn more about this credit.
Employee Retention Credit
Did you keep employees on your payroll after experiencing COVID-19 pandemic hardships? The Employee Retention Credit applies to certain qualified wages of employees you employed.
This is one of the best business tax credits. The credit is $7,000 per employee.
How many times can you apply for this credit? The good news is that you can apply it per quarter for the tax year 2021.
The Employee Retention Credit can offer your business several benefits. Visit https://erctoday.com/apply-for-the-employee-retention-credit/ to apply for the credit.
Take Advantage of These Small Business Tax Credits
Shelling out a load of money to Uncle Sam isn’t pleasant. To reduce your business taxes, you need to take advantage of these small business tax credits. As a small business owner, you might be able to reap the benefits of these four tax credits.
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