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The Good News is that part of LB 366 Passed this year the sunset date has been extended for the Nebraska Advantage Microenterprise Tax Credit Act from December 31, 2022, to December 31, 2032. In addition, the following changes apply to Nebraska Advantage Microenterprise Tax Credit Act applications received on or after August 28, 2021:

•             The limit on the total lifetime microenterprise tax credits that can be claimed by the taxpayer and any related person increased to $20,000; and

•             Spouses, siblings, ancestors, and lineal descendants except for minor sons or daughters are eliminated from the definition of related persons.

  1. A. An application submitted prior to August 28, 2021, can be withdrawn and a new application can be submitted.

B. Claims are limited to what the amount reserved on the application was. Microbusinesses can reapply after the two-year period to generate credits has passed.

  1. 20,000 less any amount previously approved on the income tax return.
  2. People previously excluded because of the family related party definition can now apply.
  3. Amounts paid to employees in excess of 150% of the Nebraska average weekly wage:
    1. 2019- $1,293 per week
    2. 2020 – $1,335 per week
    3. 2021- $1,380 per week
    4. 2022 – Wage level based on Oct 1, not available yet.
  4. DOR is in the process of updating the application guide to reflect LB366 changes. The guide should be posted in October.
  5. A govdelivery was issued August 27, 2021, to inform individuals of the updated application that incorporates LB366. A govdelivery will be issued when the application guide is complete.

The Bad News

The only Bad News is that you only have one month left in 2021 – October – to apply for this new expanded credit. You can still apply for it next year and every year you may still qualify.

Be sure to reach out to me for assistance to maximize this Tax Credit for your business.