If you're a small business owner with fewer than 25 full-time
equivalent employees you may be eligible for the small business
health care credit.
What is the Small Business Health Care Credit?
The small business health care tax credit, part of the Patient
Protection and Affordable Care Act enacted in 2010, is specifically
targeted to help small businesses and tax-exempt organizations
provide health insurance for their employees. Small employers that
pay at least half of the premiums for employee health insurance
coverage under a qualifying arrangement may be eligible for this
credit. Household employers not engaged in a trade or business also
How Does the Credit Save Me Money?
For tax years 2010 through 2013, the maximum credit is 35 percent
for small business employers and 25 percent for small tax-exempt
employers such as charities. An enhanced version of the credit will
be effective beginning Jan. 1, 2014 and the rate will increase to 50
percent and 35 percent, respectively.
sequester, which took effect on March 1, 2013 includes a reduction
to the refundable portion of the Small Business Health Care Tax
Credit for certain small tax-exempt employers. As such, the
refundable portion of the claim will be reduced by 8.7 percent.
Without congressional intervention, this rate remains in effect
until the end of fiscal year 2013 (September 30).
The amount of the credit you receive works on a sliding scale, so
the smaller the business or charity, the bigger the credit. Simply
put, if you have more than 10 FTEs or if the average wage is more
than $25,000, the amount of the credit you receive will be less.
If you pay $50,000 a year toward workers' health care premiums--and
you qualify for a 15 percent credit--you'll save $7,500. If you save
$7,500 a year from tax year 2010 through 2013, that's a total
savings of $30,000. And, if in 2014 you qualify for a slightly
larger credit, say 20 percent, your savings go from $7,500 a year to
$12,000 a year.
Is My Business Eligible for the Credit?
To be eligible for the credit, you must cover at least 50 percent of
the cost of single (not family) health care coverage for each of
your employees. You must also have fewer than 25 full-time
equivalent employees (FTEs) and those employees must have average
wages of less than $50,000 a year.
Let's take a closer look at what this means. A full-time equivalent
employee is defined as either one full-time employee or two
half-time employees. In other words, two half-time workers count as
one full-timer or one full-time equivalent. Here is another example:
20 half-time employees are equivalent to 10 full-time workers. That
makes the number of FTEs 10 not 20.
Now let's talk about average wages. Say you pay total wages of
$200,000 and have 10 FTEs. To figure average wages you divide
$200,000 by 10--the number of FTEs--and the result is your average
wage. In this example, the average wage would be $20,000.
Can Tax-Exempt Employers Claim the Credit?
Yes. The credit is refundable for small tax-exempt employers too, so
even if you have no taxable income, you may be eligible to receive
the credit as a refund as long as it does not exceed your income tax
withholding and Medicare tax liability.
Can I Still Claim the Credit Even If I Don't Owe Any Tax This Year?
If you are a small business employer who did not owe tax during the
year, you can carry the credit back or forward to other tax years.
Also, since the amount of the health insurance premium payments are
more than the total credit, eligible small businesses can still
claim a business expense deduction for the premiums in excess of the
credit. That's both a credit and a deduction for employee premium
Can I File an Amended Return and Claim the Credit for Previous Tax
If you can benefit from the credit this year but forgot to claim it
on your tax return there's still time to file an amended return.
Businesses that have already filed and later find that they
qualified in 2010 or 2011 can still claim the credit by filing an
amended return for one or both years.
February 11, 2013
SBA Number: 13-02 ADV
Report: Small Businesses Leading Nation’s Economic Recovery
Office of Advocacy Issues Report on the Small Business Economy
WASHINGTON – The economic environment is turning around for
America’s small businesses despite some lingering challenges from
the recession that hit the nation in 2008-2009, according to a new
report released today by the U.S. Small Business Administration
(SBA) Office of Advocacy, an independent office that serves as the
voice for small business within the federal government.
Small Business Economy 2012 demonstrates that small
businesses have been at the core of our economy’s growth over the
past few years,” said Dr. Winslow Sargeant, Chief Counsel for
“Thanks to hardworking small business owners across the country,
2011 represented the second full year of economic expansion since
the peak of the recession in 2009, with small businesses
representing half of the private-sector output. We still have a lot
of work to do, but this report tells an inspiring story: output,
business income and profits are rising for small businesses, and
bankruptcies and unemployment are declining.”
The Small Business Economy, an annual report
published by the Office of Advocacy for over 30 years, provides
detailed information on the performance of America’s small
businesses. For the second year in a row, Advocacy released the
full report in an online format.
report provides a rich collection of information about small
business contributions to the economy and trends over time, and is
once again available in an online format, increasing the
accessibility and usability of the information,” said Sargeant.
Highlights of the tables in this year’s report include the
Manufacturing sales, which dropped between 2005 and 2009, were up
11.7 percent between 2010 and 2011. That’s similar to the 11.2
percent increase in 2009-2010.
After falling from 2005 to 2009, the income of our smallest
businesses (proprietorships) increased by 6.0 percent from 2010 to
2011. Corporate profits, which also declined in 2005-2009, increased
by 7.9 percent in the same period.
Startups or births of employer firms were still below pre-downturn
levels – 533,945 in 2010 compared with 668,395 in 2007, but they
increased from 2009 to 2010. On the other hand, closings or deaths
of employer firms, which reached a new high of 680,716 in 2009,
declined to 593,347 in 2010.
Small firms with fewer than 500 workers outperformed large firms in
net job creation in three of the four quarters of 2011, similar to a
pattern that has existed since 1992 in periods when private-sector
employment rose. In contrast, job losses prevailed in almost all
firm sizes for the first quarter of 2008 through the first quarter
Among the self-employed, certain demographic groups saw large
increases in 2010-2011, particularly Latino, Asian, black and urban
self-employed workers and the 55+ age cohort that reflects the large
baby boom generation.
Total business lending continued to increase by June 2012; the rate
of decline slowed for small business loans of all size categories.
Funds raised by venture capital firms increased, and disbursements
increased to levels comparable to those in 2006.
Click here to read or
download a complete version of the full report.
January 17, 2013
Announces Changes to Contracting Program for Women-Owned Small
– Women-owned small businesses will have greater access to federal
contracting opportunities as a result of changes included in the
National Defense Authorization Act of 2013 (NDAA) to the U.S. Small
Business Administration’s Women-Owned Small Business Federal
“This new law is a prime example of how the Obama Administration is
embracing a more inclusive view of entrepreneurship, helping small
businesses and America succeed,” said SBA Administrator Karen
Mills. “Today, women own 30 percent of all small businesses up from
just 5 percent 40 years ago. As one of the fastest growing sectors
of small business owners in the country, opening the door for women
to compete for more federal contracts is a win-win.”
The NDAA removes the anticipated award price of the contract
thresholds for women-owned small businesses (WOSB) and economically
disadvantaged women-owned small businesses (EDWOSB) to allow them
greater access to federal contracting opportunities without
limitations to the size of the contract.
Prior to the new law, the anticipated award price of the contract
for women-owned and economically disadvantaged women-owned small
businesses could not exceed $6.5 million for manufacturing contracts
and $4 million for all other contracts.
The Women’s Federal Contract Program allows contracting officers to
set aside specific contracts for certified WOSBs and EDWOSBs and
will help federal agencies achieve the existing statutory goal of
five percent of federal contracting dollars being awarded to WOSBs.
The law also requires the SBA to conduct another study to identify
and report industries underrepresented by women-owned small
businesses. As a result, more eligible women-owned businesses may
be able to participate in SBA’s Women’s Federal Contract Program and
compete for and win federal contracts.
The SBA is working with the Office of Federal Procurement Policy
under the President’s Office of Management and Budget on the
implementation including changes to the Federal Acquisition
Every firm that wishes to participate in the WOSB program must meet
the eligibility requirements and either self-certify or obtain third
party certification. There are four approved third-party certifiers
that perform eligibility exams: El Paso Hispanic Chamber of
Commerce, National Women Business Owners Corporation, U.S. Women’s
Chamber of Commerce, and the Women’s Business Enterprise National
Council. Additional information and links about approved third-party
certifiers are available at
To qualify as a WOSB, a firm must be at least fifty-one percent
owned and controlled by one or more women, and primarily managed by
one or more women. The women must be U.S. citizens and the firm
must be considered small according to SBA size standards. To be
deemed “economically disadvantaged,” a firm’s owners must meet
specific financial requirements set forth in the program
The WOSB Program identifies eighty-three four-digit North American
Industry Classification Systems (NAICS) codes where WOSBs are
underrepresented or substantially underrepresented. Contracting
officers may set aside contracts in these industries if the contract
can be awarded at a fair and reasonable price and the contracting
officer has a reasonable expectation that two or more WOSBs or
EDWOSBs will submit offers for the contract.
For more information on the Women-Owned Small Business Program or to
access the instructions, applications or database, please visit
SBA Licenses First
Nationwide Impact Investment Fund
SJF Ventures III, LP
Will Invest in Cleantech and Positive Impact Businesses Across the
Release Date: March
WASHINGTON – The U.S.
Small Business Administration today licensed the first
nationally-focused Impact Investment Fund, SJF Ventures III, LP. The
fund will make equity investments in cleantech and technology
companies in communities nationwide as part of an impact investment
initiative to invest up to $1.5 billion in high-growth small
“SJF Ventures III, LP
is yet another important new ally in SBA’s commitment to foster
small business growth and job creation in emerging sectors,” said
Administrator Karen Mills. “They’re an experienced team that is
well-positioned to drive more investment in high growth, positive
impact companies. We will continue to grow this and other
public-private partnerships by licensing more funds and putting more
capital in the hands of small business owners to grow and create
SJF Ventures invests
growth equity in companies with strong financial, community and
environmental results. SJF’s areas of focus include: efficiency and
infrastructure; reuse and recycling; sustainable agriculture and
food safety; and technology enhanced services. The third fund
managed by SJF Ventures will build upon a successful track record of
returns and impacts across 34 SJF portfolio companies from its first
two funds. Citi Community Capital (Citi), the community development
lending and investing group of Citi, is the lead investor in SJF
Ventures III, LP, an unleveraged Small Business Investment Company (SBIC)
fund. The fund is committing up to $75 million of investment capital
over the next five years.
The impact investment
initiative is part of Startup America, a White House initiative to
bring together public and private organizations to accelerate the
growth of America’s entrepreneurs. The initiative uses the
infrastructure of the SBA’s SBIC program, an established and
successful program that operates at no cost to taxpayers. The SBIC
program began in 1958 to supplement the flow of private equity
capital and long-term loan funds to small businesses. In FY 2011,
the SBIC program provided $2.8 billion of financing to 1,339 U.S.
follows on a July, 2011 SBA licensing of InvestMichigan! Mezzanine
Fund whose investment targets a state or region, primarily Michigan,
in SBA’s new impact investment initiative.
The impact investment
initiative will drive up to $1.5 billion into the hands of small
businesses over the next five years. It provides funding for
high-growth companies that will generate not only a financial but
also a “social” return by focusing on businesses located in
underserved communities or communities facing barriers to capital.
Through the initiative
SBA will commit $1 billion to investment funds focused on investing
in underserved markets or in sectors that have been defined as
national priorities. Impact investments can be:
targeting small businesses located in or employing residents of low
or moderate income areas or economically distressed areas; or •
Sector-based, targeting industry sectors that the Administration has
identified as national priorities. Currently only clean energy and
education have been identified as priority sectors.
To serve these markets
SBA will collaborate with private, institutional investors to
identify impact investments and provide expedited licensing and
capital to fund managers who qualify to organize and operate an
Impact Investment SBIC. SBA will provide up to a 2:1 match to
private capital raised by these funds, partnering with private
investors to target “impact” investments.
High-growth firms are
a small part of the small business community, but they create a
large number of net new jobs each year. The initiative will help
high-growth companies receive the funding they need to continue to
expand and create jobs in America’s underserved communities and
For more information
on the impact investment initiative please visit
Keate Partners' Marketing & Advertising Sources
our national marketing program,
Partners is pleased to announce the
following advertising sources (using a generic description
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represent to provide national (confidential) exposure - in
addition to our own website which provides extensive local
and regional exposure with over 10,000 “hits” per month.
in Capital Gains Rate May Expire in 2012
2003 Tax Bill:
In 2003, the US Senate narrowly passed a tax relief bill
that President Bush called "a vital action that will
stimulate the economy and create jobs." This new bill cut
the Long Term Capital Gains Tax Rate to just 15%. Unless
extended, this rate reduction expires in 2010.
As illustrated below, historical capital gains tax rates have
fluctuated considerably. The rate is now at a 60 year low
representing a windfall for business owners that sell
Historically, the rate has changed every 4 years and while future
rates are obviously impossible to predict, the next likely change
will be to increase the capital gains tax to help with the large