Are there tax incentives for women-owned businesses?

Yes, while there are no specific federal tax incentives exclusively for women-owned businesses, women-owned businesses can take advantage of various general small business tax incentives available to all qualifying businesses. Additionally, there are federal and state programs designed to support women-owned businesses through grants, loans, and contracting opportunities.

Federal Tax Incentives

General Tax Incentives:

Women-owned businesses can utilize general federal tax incentives available to small businesses, such as:

• Section 179 Deduction: Allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year.
  Authoritative Sources:
  • Internal Revenue Code (IRC) § 179: Election to expense certain depreciable business assets.
    • IRC § 179
  • IRS Publication 946: How to Depreciate Property.
    • IRS Publication 946
• Qualified Business Income (QBI) Deduction: Eligible small businesses may deduct up to 20% of their qualified business income.
  Authoritative Sources:
  • IRC § 199A: Qualified business income deduction.
    • IRC § 199A
  • IRS Publication 535: Business Expenses.
    • IRS Publication 535
• Research and Development (R&D) Tax Credit: Available for businesses that incur R&D expenses in the United States.
  Authoritative Sources:
  • IRC § 41: Credit for increasing research activities.
    • IRC § 41
  • IRS Form 6765: Credit for Increasing Research Activities.
    • IRS Form 6765

Federal Programs Supporting Women-Owned Businesses

While there are no specific federal tax incentives, there are federal programs that support women-owned businesses:

1. Women-Owned Small Business (WOSB) Federal Contracting Program

• Purpose: Helps women-owned small businesses compete for federal contracts set aside for them.
• Authoritative Source:
  • U.S. Small Business Administration (SBA): WOSB Federal Contracting Program.
    • SBA WOSB Program

2. SBA Loan Programs

• SBA 7(a) Loan Program and 504 Loan Program: Provide financing opportunities for small businesses, including women-owned businesses.
• Authoritative Sources:
  • SBA Loan Programs Overview
    • SBA Loans
  • SBA Office of Women’s Business Ownership
    • SBA Women’s Business Centers

State and Local Tax Incentives

Some states and local governments offer tax incentives and grants specifically for women-owned businesses.

Examples:

• New York:
  • Women-Owned Business Enterprise (WBE) Certification: Provides access to state contracting opportunities.
  • Authoritative Source:
    • Empire State Development: Division of Minority and Women’s Business Development.
      • New York WBE Certification
• California:
  • California Supplier Clearinghouse Certification: Allows women-owned businesses to participate in procurement programs with utility companies.
  • Authoritative Source:
    • California Supplier Clearinghouse

Recommendation:

• Check State Resources: Consult your state’s economic development agency or department of taxation for specific incentives.
  Authoritative Source Example:
  • National Association of State Procurement Officials (NASPO): Provides links to state procurement agencies.
    • NASPO State Procurement Agencies

General Business Tax Incentives

Women-owned businesses can also take advantage of general business tax credits:

1. Work Opportunity Tax Credit (WOTC)

• Purpose: Provides tax credits for hiring individuals from targeted groups who have faced barriers to employment.
• Authoritative Sources:
  • IRC § 51: Work opportunity credit.
    • IRC § 51
  • IRS Form 5884: Work Opportunity Credit.
    • IRS Form 5884

2. Disabled Access Credit

• Purpose: Provides a non-refundable credit for small businesses that incur expenditures for providing access to persons with disabilities.
• Authoritative Sources:
  • IRC § 44: Expenditures to provide access to disabled individuals.
    • IRC § 44
  • IRS Form 8826: Disabled Access Credit.
    • IRS Form 8826

3. Empowerment Zone Employment Credit

• Purpose: Offers tax credits to businesses that hire employees who live and work in designated empowerment zones.
• Authoritative Sources:
  • IRC § 1396: Empowerment zone employment credit.
    • IRC § 1396
  • IRS Form 8844: Empowerment Zone Employment Credit.
    • IRS Form 8844

Key Takeaways

• No Specific Federal Tax Incentives: There are no federal tax incentives exclusively for women-owned businesses.
• Access to General Tax Incentives: Women-owned businesses can utilize all general small business tax credits and deductions.
• Federal Programs and Certifications: Federal programs and certifications can provide access to government contracts and business opportunities.
• State and Local Incentives: Some states offer tax incentives and grants specifically for women-owned businesses.

Additional Resources

• U.S. Small Business Administration (SBA):
  • Office of Women’s Business Ownership:
    • SBA Women’s Business Centers
• IRS Small Business and Self-Employed Tax Center:
  • IRS Small Business Tax Center
• National Association of Women Business Owners (NAWBO):
  • NAWBO
• Grants.gov:
  • Federal Grants Search: Find federal grant opportunities.
    • Grants.gov