In 2024, several tax credits are available for businesses in the United States.
Here are some key tax credits that businesses may be eligible for:
- Research and Development (R&D) Tax Credit: This credit incentivizes businesses to invest in research and development. It can be used to offset federal income tax liability and, in some cases, payroll tax liability for certain small businesses.
- Work Opportunity Tax Credit (WOTC): This credit is available to employers who hire individuals from certain targeted groups that face significant barriers to employment. The credit amount varies depending on the employee hired and the duration of their employment.
- Employee Retention Credit (ERC): This credit was introduced to help businesses retain employees during the COVID-19 pandemic. While the availability and specifics of this credit have changed over time, businesses should check current guidelines to see if they still qualify.
- Energy-Efficient Commercial Buildings Deduction (Section 179D): This deduction allows businesses to deduct the cost of energy-efficient improvements to commercial buildings, such as HVAC systems, lighting, and building envelope components.
- Investment Tax Credit (ITC): This credit is for businesses that invest in renewable energy projects, such as solar or wind energy. The ITC allows businesses to deduct a percentage of their investment from their federal taxes.
- New Markets Tax Credit (NMTC): This credit is designed to encourage investment in low-income communities. Businesses can receive a tax credit for making qualified equity investments in Community Development Entities (CDEs).
- Disabled Access Credit: Small businesses can receive a credit for expenses incurred to provide access to persons with disabilities. This includes expenses for barrier removal, provision of services, and modifications to equipment or facilities.
- Alternative Motor Vehicle Credit: This credit is for businesses that purchase qualified alternative fuel vehicles, such as electric or hydrogen fuel cell vehicles. The credit amount depends on the type of vehicle and its fuel efficiency.
- Small Business Health Care Tax Credit: This credit helps small businesses afford the cost of providing health insurance to their employees. To qualify, businesses must meet certain requirements regarding the number of employees and the average wages paid.
- Empowerment Zone Employment Credit: Businesses that operate in federally designated empowerment zones and hire employees who live in these zones can claim this credit.
For the most current and specific information about eligibility, requirements, and application procedures for these and other tax credits, contact a tax professional at Tax Credit Group or refer to the latest IRS guidelines.