Small Business Tax Cuts to Spur our Economy

In the 111th Congress, I worked hard to pass influential legislation that provides significant tax cuts to support our small businesses- the economic engine for job growth.  Here are some of the tax cuts signed into law during the last congress that continue to benefit small businesses.

* Effective January 1, 2010, provide $40 billion in tax credits for small businesses to help them offer employee health insurance coverage – if they choose to do so. These tax credits will cover a portion of the premium costs for their employees’ coverage.  More than 4 million small businesses are eligible for these credits.  (Affordable Care Act, PL 111-148)

* Help businesses quickly recover costs of new capital investments by providing increased bonus depreciation for businesses that made investments in new plants and equipment in 2009. (Recovery Act, PL 111-5; extended PL 111-312)

* Spur investments in small businesses by providing an exclusion of 75 percent (up from 50 percent) of capital gains from taxes for investors in small businesses who buy stock (in 2009 and 2010) and hold it for more than five years. (Recovery Act, PL 111-5; extended PL 111-312)

* Reduce the required estimated tax payments for certain small businesses in 2009. (Recovery Act, PL 111-5; extended PL 111-312)

* Provide tax relief for taxable corporations converting into S corporations in 2009 and 2010 by reducing the built-in gains holding period from 10 years to 7 years (with gains held for the holding period exempt from tax).  (Recovery Act, PL 111-5; extended PL 111-240)

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Business Tax Benefits under the Hiring Incentives to Restore Employment (HIRE) - signed into law on March 18, 2010

• Tax incentives for businesses to spur immediate job growth. This payroll tax exemption creates a common-sense, targeted, and effective way to encourage employers to begin hiring unemployed workers today and is estimated to spur about 300,000 new jobs.
• Payroll Tax Exemption. Provides businesses with an exemption from Social Security payroll taxes for every worker hired in 2010 who has been unemployed for at least 60 days. (The maximum value of this incentive is $6,621, which equals to 6.2 percent of wages paid in 2010 up to the FICA wage cap of $106,800.) The longer that a business has a new qualified worker on its payroll, the greater the tax benefit. The House amendments incorporate an IRS fix to make sure that small businesses can take advantage of the payroll tax holiday.
• Bonus for Keeping Employees Long Term.  Provides an additional $1,000 income tax credit for every new employee retained for 52 weeks.  Estimated cost of these provisions: $13 billion over 10 yearsBusiness Tax