IRS Outlines New Tax Incentives Available to Small Businesses in 2010

This week, the Internal Revenue Service [IRS] released the Tax Changes for Small Businesses fact sheet. Last year, the Small Business Jobs Act of 2010, along with the Patient Protection and Affordable Care Act, provided key tax incentives for small businesses and self-employed individuals.

The IRS fact sheet highlights 2010 tax changes and details how taxpayers claim benefits.

"Through reforms in our nation’s troubling health-care system and by providing more than $12 billion in immediate, targeted tax incentives to small businesses, the last two years have been about supporting American’s small businesses," said Sen. Mary L. Landrieu [D-La., pictured], chair of the U.S. Senate Committee on Small Business and Entrepreneurship, and a lead sponsor of the Small Business Jobs Act of 2010. "As chair of the Senate Small Business and Entrepreneurship Committee, it has been my priority to find avenues to improve our nation’s economy and put dollars back into the pockets of America’s entrepreneurs.

"With tax season upon us, the IRS is making sure taxpayers are aware of these important deductions available to them. As we convene the 112th Congress, I will continue to fight for these small businesses to ensure that they continue to receive the tax incentives they need to drive our economy."

The IRS fact sheet breaks down the tax portions of the Small Business Jobs Act of 2010 and the Patient Protection and Affordable Care Act that are available to eligible small businesses in 2010. The document details the self-employed health insurance deduction, which allows self-employed individuals to deduct their health-care costs for payroll tax purposes.

In addition, the 2010 fact sheet outlines ways for small businesses to take advantage of the Small Business Health Care Tax Credit and the General Business Credit for Employers, as well as higher expensing and depreciating limits for small businesses.

The complete fact sheet, with the tax incentives available for small businesses for the 2010 tax year, is available on the "Resources" page of the Small Business Committee website at http://sbc.senate.gov/.

SOURCES: Internal Revenue Service, U.S. Senate Committee on Small Business and Entrepreneurship
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Landrieu Praises Extension of Important Recovery Act Lending Provisions to Benefit Small Businesses

Late last evening, United States Senator Mary L. Landrieu [D-La., pictured], chair of the Senate Committee on Small Business and Entrepreneurship, commented on passage of the extension of several American Recovery and Reinvestment Act [ARRA] provisions that were set to expire on April 30, 2010. The extension provided $80 million to extend the higher guaranty for 7[a] loans, plus fee waivers for borrowers of 7[a] and 504 Small Business Administration [SBA] loans.

These measures complement recently enacted small-business tax incentives included in the HIRE Act -- such as the new-hire payroll tax exemption, and the extended section 179 small-business expensing provision. The Senate voted 59-38 to extend the provisions that eliminated borrower fees for small businesses looking to grow their companies through May 31, 2010.

"The Recovery Act provisions extended tonight will continue to free up credit for small businesses looking to expand, hire new workers or upgrade equipment," said Sen. Landrieu. "I applaud my colleagues in Congress for recognizing the success of these lending programs, and thank them for their continued support of small businesses across the country. Ranking Member Olympia Snowe [R-Maine] has shown her commitment to true bipartisanship for the good of small businesses still struggling to stay afloat.

"As we continue to support America’s entrepreneurs, we must continue to look at a longer-term extension of these provisions to continue this country’s small-business growth. The Small Business Committee has a package of proposals that have passed the Committee by wide, bipartisan margins, and we will continue to work on their inclusion in the next jobs bill debated by the Senate and urge their swift adoption."

SOURCES: Internal Revenue Service, U.S. Senate Committee on Small Business and Entrepreneurship, U.S. Small Business Administration
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Administrator Mills: SBA Re-Activating Recovery Loan Queue by Monday, Feb. 22

SBA issued the following statement today from Administrator Karen Mills [pictured] regarding efforts to ensure continued funding for two key provisions in the American Reinvestment and Recovery Act [ARRA] of 2009:

"SBA’s most popular ARRA provisions -- the increased guarantee and reduced fees in the two largest lending programs -- have helped engineer a significant turnaround in SBA lending. Continuing those ARRA provisions is SBA’s top priority.

"Through the original $375 million and the additional $125 million appropriations for these two provisions, SBA has supported more than $20 billion in lending to small businesses across the country and seen its average weekly loan volume increase by nearly 90 percent since February 2009.

"Through ARRA, we brought nearly 1,100 lending institutions back to the SBA’sprograms that had not made an SBA loan since at least 2007. All told, these steps have benefited tens of thousands of small businesses and supported hundreds of thousands of jobs during these tough economic times. However,we know there is still more work to be done. As the President has requested, we will continue to work with Congress to extend these programs through September 2010.

"The additional $125 million appropriation approved in December to extend SBA’s 7[a] loan guarantee to 90 percent, and reduce or eliminate borrower fees on both the 7[a] and 504 loans, will be used faster than expected.

"Loan volume has surged since earlier this week, when an Information Notice was released to lenders. SBA communicated with its lending partners today that it will re-activate the Recovery Loan Queue no later than Monday, Feb. 22. The Queue is an efficient and transparent process that will ensure that every remaining dollar possible is made available to help small businesses drive economic recovery across the country.

"The SBA advocates for small businesses across the federal government, and will continue its efforts to keep America’s small businesses on a path to recovery and long-term success. Small businesses are a central piece of President Obama’s Jobs Plan because they have been, and will continue to be, a key engine for job creation across the country.

"With that in mind, President Obama laid out an aggressive agenda for providing small businesses with the support they need to create jobs and drive economic recovery. That agenda includes proposals in three key areas: expanding access to capital; providing tax incentives to encourage job creation; and maximizing the potential of innovative, high-growth companies."

SBA’s ARRA Programs
SBA received $730 million in ARRA to support economic recovery programs for small businesses. Included in the appropriation was $375 million to support raising the government guarantee to 90 percent on SBA’s 7[a] loans, and reducing some lender and borrower fees on its 7[a] and 504 loans -- the agency’s two largest lending programs.

The funds for these popular provisions ran out in November 2009. SBA received an additional $125 million appropriation in December 2009, along with authority to continue both of the programs through February.

SBA’s 7[a] and 504 ARRA Transition Plan
SBA is in the process of finalizing the plan for transitioning its 7[a] and 504 programs back to their pre-ARRA terms and communicating those plans with its lending partners. This plan, when implemented, will include re-activating the Recovery Loan Queues no later than Monday, Feb. 22, 2010. The Queues will operate in the same manner as when originally implemented in November 2009.

Sometimes, previously approved loans are later cancelled or never disbursed for a variety of reasons. The Queues take this into account and, beginning on the transition date, will allow eligible small businesses -- in consultation with their lenders -- to choose to be placed in the Queue for possible approval of an ARRA loan if funding becomes available.

Small-business owners and lenders will have transparent access to the Queue via http://www.sba.gov/recoveryq/index.html, and will be able to remove themselves from the Queue at any time to be considered for a non-ARRA SBA loan with all applicable fees and, for 7[a] loans, standard guaranty levels.

Authorization for the 90 percent guarantee on 7[a] loans ends Feb. 28, 2010, though funds may be exhausted sooner. Furthermore, applications in the Queues after Feb. 28, 2010, will only be eligible for decreased or eliminated borrower fees when funds become available.

To learn more about SBA’s ARRA programs and other resources for small businesses, please visit http://www.sba.gov/.

SOURCES: Recovery.gov, U.S. Small Business Administration, The White House
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Sen. Kerry, Rep. Klein Help Small Businesses Employ Military Reservists

Sen. John Kerry [D-Mass., pictured], a senior member and former chairman of the U.S. Senate Committee on Small Business & Entrepreneurship, and Congressman Ron Klein [D-Fla.] today announced their introduction of a bill to support small businesses that employ military reservists.

The Small Business and Military Family Assistance Act of 2009 will provide tax incentives for small-business employers who make up the salary difference for their reservist employees while they’re serving in Iraq or Afghanistan. While many large businesses can afford to supplement the lower wages that reservists earn while in active duty, small-business owners struggle to offer the same service.

"Our legislation supports the small businesses that stand by our men and women in uniform when reservists are deployed," said Sen. Kerry. "It keeps our service members employed, and small businesses open for business. In the face of a tough economy, we can do more to support the employers and reservists who make such profound contributions to our economy and national defense."

"One of our most important responsibilities is to stand behind our military service members," Rep. Klein added. "This legislation does exactly that by ensuring that reservists and their families do not see a drop in income when they are called up to active duty.

"Many small businesses voluntarily choose to support our troops by making up the difference between military and civilian pay when one of their employees is called to active duty service. This is the right thing to do, and these businesses should be supported and rewarded with tax incentives. This selfless dedication to our service members proves once again that small businesses are not only the heart of our economy; they are the soul of our communities."

"MOAA strongly supports this employer wage credit extension, as it recognizes the sacrifices American employers endure in supporting their activated Guard and Reserve employees," said Vice Admiral Norb R. Ryan Jr., USN [Ret.], president of the Military Officers Association of America.

Small businesses employ nearly 20 percent of all reservists who hold civilian jobs. Many employers pay their employees who are called up for active duty a salary differential.

For example, if an employee was making $60,000 before being called up and makes $40,000 in the military, the employer will make up the $20,000 difference. Sen. Kerry’s legislation provides small businesses with fewer than 50 employees, a tax credit for 20 percent of the pay differential. The maximum credit is $4,000.

SOURCE: Senator John Kerry
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