Overlooked Business Credits You May Be Eligible For
Running a business comes with a long list of expenses, but many business owners overlook valuable business tax credits that could reduce their tax liability and increase their bottom line. While tax deductions lower your taxable income, small business tax credits provide a dollar-for-dollar reduction in the amount of business taxes owed, making them highly beneficial.
At America’s Tax Defender, we specialize in helping businesses identify and claim federal tax credits they may not even know exist. We proudly represent clients in all 50 states and are headquartered in Tampa, FL. In this article, we’ll highlight some of the most commonly overlooked tax credits for businesses and how you can determine if your small business qualifies for them.
1. Research and Development (R&D) Tax Credit
One of the most underutilized business tax credits, the R&D Tax Credit, is designed to encourage businesses to invest in innovation and development. Many business owners assume they must be conducting groundbreaking scientific research to qualify, but that’s not the case.
Who Qualifies?
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Companies that develop new or improved products, processes, or software
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Businesses investing in experimental projects
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Manufacturers, software developers, and engineering firms
How Much Can You Claim?
This small business tax credit is calculated based on qualified research expenses (QREs) such as wages, supplies, and contract research. Eligible businesses can potentially receive a credit of up to 14% of QREs.
2. Work Opportunity Tax Credit (WOTC)
The WOTC tax credit is a federal tax credit for businesses that hire individuals from certain target groups who face barriers to employment.
Who Qualifies?
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Veterans
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Ex-felons
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Long-term unemployed individuals
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Food stamp (SNAP) recipients
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Supplemental Security Income (SSI) recipients
How Much Can You Claim?
Depending on the employee’s background and hours worked, this business tax savings credit can range from $1,200 to $9,600 per employee.
3. Disabled Access Credit
Businesses that make their facilities more accessible to individuals with disabilities may qualify for the Disabled Access Credit.
Who Qualifies?
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Small businesses (gross receipts under $1 million or fewer than 30 employees)
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Businesses that incurred expenses to comply with the Americans with Disabilities Act (ADA), such as:
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Installing ramps, widening doorways, or modifying restrooms
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Providing braille materials or sign language interpreters
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How Much Can You Claim?
The credit covers 50% of eligible expenses over $250, up to a maximum credit of $5,000 per year.
4. Small Business Health Care Tax Credit
If you provide health insurance to your employees, you may qualify for the Small Business Health Care Tax Credit, designed to encourage businesses to offer coverage.
Who Qualifies?
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Businesses with fewer than 25 full-time equivalent employees
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Employers who pay at least 50% of employees’ health insurance premiums
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Average employee wages must be less than $56,000 per year (as of 2024)
How Much Can You Claim?
Eligible businesses can claim up to 50% of premiums paid for two consecutive tax years.
5. Employee Retention Credit (ERC)
Although the Employee Retention Credit (ERC) was initially a COVID-19 relief program, some businesses may still be able to claim it retroactively for previous years.
Who Qualifies?
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Businesses that experienced a significant revenue decline due to COVID-19
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Companies that were partially or fully shut down by government orders in 2020 or 2021
How Much Can You Claim?
The ERC tax credit can be worth up to $7,000 per employee per quarter in 2021, making it one of the most lucrative small business tax credits available.
6. New Markets Tax Credit (NMTC)
The New Markets Tax Credit encourages investment in low-income communities, making it a great option for businesses looking to expand in underserved areas.
Who Qualifies?
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Businesses that invest in or operate within qualified low-income census tracts
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Companies receiving financing from a Community Development Entity (CDE)
How Much Can You Claim?
Investors can receive a 39% credit on their qualified business investment, spread over seven years.
Maximize Your Business Tax Savings with America’s Tax Defender
Many businesses miss out on these valuable business tax credits simply because they aren’t aware they exist. At America’s Tax Defender, we specialize in helping businesses uncover tax-saving opportunities, maximize tax credits, and remain compliant with IRS tax laws. We proudly serve clients in all 50 states and are headquartered in Tampa, FL.
Why Choose Us?
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Expertise in business tax credit eligibility and compliance
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Assistance with retroactive claims for past business tax years
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Audit support and IRS tax defense services
If you want to find out which federal business tax credits your business may qualify for, contact America’s Tax Defender today for a consultation. Don’t leave money on the table—let us help you get the business tax credits you deserve!
