While the President’s and other government websites do not yet reflect an updated status for the bill, we were able to get this odd photograph from the President’s September Photos of the Day page. The caption reads, “President Barack Obama greets small business owners after signing the Small Business Bill in the East Room of the White House, September 27, 2010.”
I am guessing that is the President’s arm reaching out from the upper left corner.
So, it looks official. The Small Business Jobs Bill has been signed into law. See related posts.
Most of the media coverage about this bill has been focused on its small business loan provisions. My primary interest, however, is in its tax credit provisions. This bill significantly expands small business’ ability to utilize general business credits, including the Work Opportunity Tax Credit, Research and Development Tax Credit, and the Empowerment Zone Employment Credit, among many others.
Beginning with tax credits generated in 2010, the bill’s tax credit provisions:
- Apply to businesses with $50 million or less in gross income (averaged over past 3 years)
- Allow all “general business credits” generated in 2010 to be carried back 5 years to secure tax refunds.
- Removes the alternative minimum tax (AMT) provision that previously limited the use of tax credits by businesses subject to AMT
As always, if you have questions feel welcome to contact me. I am Vaughn Hromiko. vah@wotcPlanet.com or (800) 655-5281, ext 101.
[Update 10-11-2011: Although the legislative summary by Senate Finance Committee does not mention this, the IRS website states that these provisions only apply to tax credit generated in 2010 or that was carried forward to 2010 from prior periods. Here’s the IRS language:
“This is a one year initiative applicable only to the tax year 2010 (For fiscal year filers, the effective tax year is the first tax year beginning after December 31, 2009). The five-year carryback period is available only for credits carried forward to the tax year 2010 and/or earned in the tax year 2010”
End update] [Update 10/24/2011: The day after I posted the previous update above, the IRS changed the language I quoted, creating a much different picture of the tax credit available for carry back. As of October 12, 2011 the IRS site reads :
“This is a one year initiative applicable only to the tax year 2010 (For fiscal year filers, the effective tax year is the first tax year beginning after December 31, 2009). The five-year carryback period is available only for credits earned in the tax year 2010.”
Note that it now explicitly states that only credit generated in tax year 2010 is able to be carried back 5 years.