Nebraska Advantage Micro Enterprise Tax Credit

It is a very long name for a really good credit for small business.  If your business is in a growth environment it may be perfect for you. Your business may make you eligible for up to $10,000 tax credit through the course of its growth.  The credit is a refundable credit.  Meaning it can offset taxes due or you can receive a refund of any unused amount.  Here are the basics:

  • You must be active in your micro-business.  Most businesses qualify in the regard of being active.  One that I know is difficult to get accepted is rental property owner.  Though it is easy to show the expense necessary to receive the credit, it is difficult to show you are active.
  • To get the full credit you must spend $50,000 in key areas of growth.  The idea of the credit is to stimulate the economy by growing business and jobs.  Thinking in those terms the categories make sense.  If you spend less than $50,000 you would receive less credit, so only apply for what you need.  The $10,000 is per lifetime, per family member and per business the way I interpret the rules.  Therefore you can go back and get more if some is left on the table however your base year (discussed later) would change.  Those key areas
    • Asset purchases (vehicles are excluded), but machines furnishings and other property are acceptable
    • Repair and Maintenance – I believe the idea is keeping things in tip top shape will make more money and improve longevity of your business.
    • Advertising (Websites are excluded at last check)
    • Legal and Professional fees – The cost of accountants and attorneys
    • New Leases – Your business is expanding and needs more space
    • Compensation – This refers to paying employees and yourself (in certain situations)  You must E-Verify
    • Health Insurance Plans for the company.

VERY IMPORTANT:  If this all sounds good so far?  You must apply and be approved for the credit prior attempting to claim the refund.  The application process can be a bit challenging.  For more information or assistance in filing the application or claims for refunds feel  free to contact us.  We can help determine strategy prior to applying, assist with E-verify and payroll requirements, and help keep track of proof of expenses for the credit.  GOOD LUCK!  Enjoy the refund.

Attached is a link to the Application guide  http://www.revenue.nebraska.gov/incentiv/neb_adv/312_guide.html 

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