Grants and Programs for SMBs in the US
Research shows that there are several tax deduction options and strategies are available to small business entities within the United States. These include options such as the Work Opportunity Tax Credit, which involves hiring works for a particular demographic subset, as well as the credit for employers who purchase a government health plan and assist in paying premiums for their employees. Research also shows that grants available to small businesses are mainly aimed at niche industries, focus on veteran, minority, or woman owned businesses, and mainly involve a competitive award system.
Tax Deduction Options for Small Businesses
Credit for Small Employer Health Insurance Premiums
- Under the Small Employer Health Insurance credit, a qualified small business employer can claim a credit of up to 50% of premiums paid for their employees' health care coverage.
- In order to qualify for this credit, an employer must have bought the coverage through the government’s Small Business Health Options (SHOP) program.
- The employer must have also paid at least half of their employees’ premiums, have fewer than 25 full time employees, average payroll is equal or less than $53,400 in 2018, and the credit can only be claimed for 2 consecutive years.
Credit for Increasing Research Activities
- According to the Credit for Increasing Research Activities, if a business conducts research activities and increases the investments into those activities, the employer can claim a 20% credit against the difference to offset income tax.
- Regarding small businesses, the increase of costs concerning research activities can be used to offset an employer's share of Social Security taxes. This offset can amount to a $250,000 credit.
- In order to claim this credit a business would need to file IRS form 8974 and IRS form 6765.
Work Opportunity Tax Credit
- The Work Opportunity Tax credit is available to employees who hire and employ workers from disadvantaged and underrepresented groups. Credit from this program can equal anywhere from $1,200 to $9,600 per employee.
- Workers that fall within the sectors of disadvantaged and underrepresented include veterans, summer youth employees, ex-felons, Temporary Assistance for Needy Families (TANF) recipients, several others groups.
- The exact amount of the credit a business could receive is based on factors such as: the target group of the individual, the duration of unemployment, wages paid to the worker, and how many hours the employee works in their first year of employment. There is also no cap to number of employees a business can hire to claim this credit.
Grants Available to SMBs
Small Business Innovation Research Program
- Managed by the Small Business Administration, the Small Business Innovation Research Program(SBIR) is a competitive grant program that encourages federal research & development that has the potential for commercialization.
- The federal agencies that participate in the SBIR program include the Department of Agriculture, Department of Commerce, Department of Defense, Department of Energy, and several other government agencies.
- Grants and award amounts for the program normally do not exceed $150,000 total costs for 6 months within the program 1st phase and $1,000,000 for 2 years, within the 2nd phase.
Cartier Woman's Initiative Program
- The Cartier Woman's Initiative program focuses on assisting women entrepreneurs to expand their business and take them to the next level of growth.
- The program is based on a competitive award structure, and at the end of the program, 14 businesses will receive $30,000, and the top seven will receive $100,000 each.
- In order to apply the business must be early stage (in operation less than 5 years), have woman leadership & ownership, have less than $2 million in dilutive funding, and is for-profit.
The Coca-Cola Foundation
- The Coca-Cola Foundation has issued grants totaling over $138 million in 2017 alone. The foundation aims at awarding organizations and companies that have focused on addressing critical community issues.
- The current priority areas the foundation is focusing on funding are: empowering women, protecting the environment, and enhancing communities.
- Companies that have objectives and goals that meet the standards of the Coca-Cola Foundation can apply through their online system for consideration.