by Peter A. Steele, Regional Administrator, U.S. Small Business Administration
There’s good news for filers this tax season – and few Americans are seeing more benefits than our small businesses right here in Vermont.
Nationally, the average federal tax return is up 11% over last year. Over 12 million small businesses have seen an average refund of over $7,000, and 25% of people have taken advantage of no tax on overtime.
And that’s huge news for our economy. Every dollar that a small business saves will be reinvested back into our communities – into new jobs, into new equipment and new investments.
The permanent extension of the 20% Small Business Deduction alone is delivering about $4,600 in average tax relief to 8 million entrepreneurs around the country.
More than 4.6 million taxpayers have claimed the No Tax on Tips deduction, and nearly 20 million have benefited from No Tax on Overtime.
This is the historic relief that President Trump promised with his Working Family Tax Cuts – and that Congressional Republicans helped to deliver.
Here in Vermont, the Council of Economic Advisers (CEA) finds that the Working Family Tax Cuts will raise wages in Vermont by an inflation-adjusted range of about $3,800 to $6,900 over the next four years.
A typical family with two children in Vermont can expect to see higher take-home pay of about $7,400 to $10,600 with the Working Family Tax Cuts.
Around 3% of the labor force is employed in occupations that would likely benefit from the no taxes on tips provision of the Working Family Tax Cuts.
Around 100,000 seniors in Vermont could benefit from the no taxes on social security provision of the Working Family Tax Cuts.
Around 25% of all employees in Vermont regularly work overtime and could benefit from the no tax on overtime provision of the Working Family Tax Cuts. An even larger 63% of workers in Vermont are in occupations that are likely eligible for overtime and could also benefit.
CEA finds that the Working Family Tax Cuts will protect about 13,000 full-time equivalent jobs in Vermont over the next four years.
There are several provisions in the Working Family Tax Cuts that will boost the manufacturing industry. In Vermont, about 5% of firms, 5% of establishments and 12% of employment is in the manufacturing sector.
The Working Family Tax Cuts extends the 199A passthrough deduction for small businesses. There are about 13,000 firms in Vermont that could be eligible for the deduction, or about 43% of all firms.
The Working Family Tax Cuts enhances Opportunity Zones incentives and makes the policy permanent. In Vermont, there are 25 Opportunity Zones. CEA finds that Opportunity Zones created an estimated 3,000 jobs through 2021 and led to the construction of about 500 housing units in Vermont though the third quarter of 2024.
While some small businesses and taxpayers may have dreaded filing their taxes in the past, this year they have reason to celebrate. That’s because this Administration is making sure that hard-working Americans and their families are getting the tax cuts and benefits they deserve.
We hope you enjoy your refund or take advantage of the new tax benefits for your company or small business. And remember, the best place to reinvest your money is in the small businesses and companies that drive your local economy. Happy Tax Day!