The government wants to give a big “thank you” for the benefits your business has brought to your community.
What are the specific actions my business can be rewarded for?
- Locating and remaining in challenging areas
- Employing those who live in difficult areas or those in difficult circumstances (e.g. Veterans, Food Stamp Recipients, Retrained Workers, etc.)
- Purchasing Machinery and Equipment
- Expanding Facilities
- Research and Development
How are tax credits applied?
A tax credit dollar can be used to pay a dollar of income tax that is due. For example, if a business has a Net Profit of $1,000,000 there will generally be income taxes that are due. And, that tax liability can be paid by applying the tax credits against the tax liability. In the end, you pay fewer dollars out of your business’ pocket.
What form do you receive payment in?
If the tax credits you receive are for past years of taxes already paid, then you receive a check to be deposited into your business’ bank account.
If the tax credits are for the current year then they are applied against your current tax bill.