Tax Credits for Small Businesses

Tax Credits for Small Businesses

Small Business Health Care Tax Credit

• For employers with fewer than 25 FTE employees
• Average wages under $61,400/year
• Must contribute at least 50% of employee premium costs
• Maximum credit: 50% of premium costs (35% for nonprofits)

Work Opportunity Tax Credit (WOTC)

• Credit for hiring from targeted groups (veterans, ex-felons, SNAP recipients, long-term unemployed, etc.)
• Credit ranges from $1,200 to $9,600 per employee depending on category
• Must certify eligibility before first day of work (Form 8850)

Research & Development (R&D) Tax Credit

• Credit for developing new products, processes, or software
• 20% of qualified research expenses above a base amount
• Payroll tax offset: Qualified small businesses can use up to $500,000 of R&D credit to offset payroll taxes

Disabled Access Credit

• Small businesses that make accessibility improvements to comply with ADA
• 50% of eligible expenses over $250, up to $10,250
• Maximum credit: $5,000

FICA Tip Credit

• For food and beverage businesses
• Credit for employer FICA taxes paid on tips above minimum wage equivalent

Retirement Plan Start-Up Credit

• Up to $5,000 for setting up a qualified retirement plan
• Plus up to $1,000 per employee for auto-enrollment features

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Small business owner? Tax credits reduce your tax bill dollar for dollar — we'll find every one you qualify for.