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Missouri Small Business Deduction for New Jobs

09.04.2013

September Financial Fitness Logo

 A new deduction could save your small business money. Karen Stern, partner in charge of BSW Small Business Services, outlines the criteria and requirements in this month’s “Financial Fitness” column, as featured in Small Business Monthly.

Small business owners - or business owners of any size - are always looking for ways to save money. You could be eligible to claim the Small Business Deduction for New Jobs (SBDNJ) if you meet the following criteria:

  • Did you create a new job in 2011 or 2012?
  • Did that employee complete at least 52 weeks of full-time employment?
  • Did that employee average at least 35 hours per week?

The SBDNJ is in effect for corporations or individuals with tax years beginning on or after January 1, 2011 and ending on or before December 31, 2014. Pass-through entities qualify for tax years ending on or after August 28, 2012. Shareholders, partners, or members may now claim the deduction on their individual returns.
The deduction is $10,000 for each new job created or $20,000 for each new job created by a small business that paid at least 50% of all employees’ health insurance premiums. To claim the deduction:

  • The employee’s average wage must be at least the county average wage as determined by the Department of Economic Development
  • Attach Form MO-NJD to your tax form
  • Fewer than 50 full-time or part-time employees must be employed at the business at all times for the years the deduction is taken
  • If the business is affiliated with other businesses, the total employees of all businesses must be included when determining the 50 employee count
  • There must be more full-time employees in the deduction year than the previous year
  • Employees for whom the deduction is taken must not have been previously employed with the business or affiliates for 12 months prior to the creation of the new job

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