Small Business Jobs Act of 2010
With the recent enactment of the Small Business Jobs Act of 2010, I wanted to quickly alert you to the immediate benefits available. This legislation clears the way for short-term temporary measures that make funding immediately available to small businesses, including temporary exclusion of 100% of gain on small business stock with no minimum tax preference for qualified stock acquired between enactment and January 1, 2011. Other measures enhance a variety of government loan guarantees and loan commitments and provide tax relief and support for small businesses.
Some provisions benefiting small businesses include:
Business Investment Incentives
- Increased small business (Section 179) expensing for 2010 and 2011;
- Extension of 50% bonus first-year depreciation for 2010.
Incentives to Start and Finance Small Businesses
- Tax deductions increase for start-up expenses for 2010.
Business Tax Credit Incentives
- An increase from one year to five years for the small business 2010 general business credit carryback period; and
- Small businesses’ general business credits in 2010 are not subject to alternative minimum tax.
Other Small Business Tax Incentives
- Temporary reduction in recognition period for built-in gains tax;
- Cost of health insurance is deductible when calculating 2010 self-employment tax; and
- Cell phones and telecommunications equipment are removed from listed property standards.
New SBA Financing Alternatives
- New $30 billion lending fund enables community banks and other financial institutions to initiate small business loans;
- Up to $7.5 billion in low-interest refinancing is available for two years after enactment;
- Government loan guarantees increased to 90% of loan amount;
- Loan commitment limits increased to $4.5 million and total gross loan amount to $5 million;
- Raises loan maximums for plant acquisition, construction, conversion, and expansion to $5 million or more;
- Raises loan maximums for plant acquisition, construction, conversion and expansion to $5 million or more; and
- Microloan Program maximum loan amount increased to $50,000.
Other Small Business Provisions
- Federal agencies are required to include small businesses in federal contract bid solicitations;
- Strategic mentoring programs between large and small business will be studied;
- Health insurance costs will be excluded for determining earnings from self-employment;
- New pilot programs establish not-for-profit lenders as small business loan intermediaries; and
- State Small Business Credit Initiatives and small business development centers are supported.
These are just the highlights of important changes made by the legislation. For more details about any aspect of the new law, please give me a call.