Federal Stimulus and You

Businesses

Below are some highlights of the provisions included in the federal stimulus package that can benefit local businesses.  A full summary of the key provisions is available from the Senate Finance and House Ways and Means committees, HERE. For more comprehensive information on tax relief provisions, please visit the IRS website HERE.

Small Business Programs – the bill provides $730 million to the Small Business Administration (SBA) and makes changes to the agency’s lending and investment programs so that they can reach more small businesses that need help.  The key provisions include temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans; a new loan program to help small businesses meet existing debt payments; and expansion of the Microloan program.  For more information, visit the SBA website HERE.

Work Opportunity Tax Credit - tax credit for businesses that hire disadvantaged workers like certain unemployed veterans (discharged during 5-year period prior to hiring) and “disconnected” youth (age 16-25, not employed or a student for 6 months prior to hiring).

Bonus Depreciation Rules – extends bonus depreciation rules that allow businesses to recover the costs of capital expenditures made in 2009 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write-off fifty percent of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2009 for use in the United States.

Operating Loss Carry-Back - Allows businesses ($15M or less gross receipts) to “carry-back” operating losses in 2008 and 2009 for up to five years (currently two years), but election must reduce losses by 10%. Suspends current law to allow 100% offset (currently 90%) of AMT income.
Companies receiving Troubled Asset Relief Program (TARP) funds would not be eligible for the extended carry-back election.

Expansion of Trade Adjustment Assistance Programs - the bill significantly expands current Trade Adjustment Assistance Programs (TAA). Among other things, it extends TAA to trade-affected services sector workers and workers affected by offshoring or outsourcing to all countries, including China or India. It increases training funds available to states, creates a new TAA program for trade-affected communities, allows for automatic TAA eligibility for workers suffering from import surges and unfair trade, makes training, healthcare and reemployment TAA benefits more accessible and flexible, and improves the TAA for Firms and TAA for Farmers programs. It reauthorizes all TAA programs (which expired December 31, 2007) through December 31, 2010.