I have a new client who is blind and owns a newly formed LLC (S-corp) in Illinois.
The Illinois Department of Human Services' Division of Rehabilitation Services (DHS/DRS) is the state's lead agency serving persons with disabilities.
My client is part of a program called The Business Enterprise Program for the Blind (BEPB), which offers experienced small business owners all start up costs associated with equipment, products and structural design are managed by the BEPB program.
The Illinois Department of Human Services gave my client a no-interest loan for inventory and working capital, which is expected to be paid back.
The company had net income of $10,589. Upon completing a DRAFT of her return, she ends up owing Illinois $683 .
QUESTION: Wouldn't there be any business credits for a blind business owner operating a state program?
Your question isn't really clear.
Business Credits from any State or Federal programs would have nothing to do with the fact that the business person accepted the terms of a Loan. You told us this: "gave my client a no-interest loan for inventory and working capital, which is expected to be paid back."
They don't just Give it; you apply and accept the Offer, or you decide you don't want to borrow. Does that loan have a forgiveness component?
So, if you take out a loan that has no forgiveness component, why would it Not need to be repaid?
And for this part: "The company had net income of $10,589. Upon completing a DRAFT of her return, she ends up owing Illinois $683"
Doesn't tell us anything about the Loan. Is that simply Tax on Income? That's a nice 6%.
"Level Up" is a gaming function, not a real life function.
Hello, thank you so much for your response.
Yes, the $683 is simply tax on income. She was surprised she owed the state any money and kept telling me she should receive "some business credit" for being a blind small business owner running a state funded program.
I began to second guess myself after speaking with her and figured I would post on here.
The loan is not forgivable. She had a profit of $10,589. I provided her with her K-1 and a voucher to pay Illinois $683.00. I will explain to her that the she is responsible for state income taxes.
There may be tax breaks for your client. I found this on the business enterprise web site:
This is a link: https://www.dhs.state.il.us/page.aspx?item=46499
- A company hosting a vendor is potentially eligible for tax breaks or credits. We have dedicated staff members available to outline specific tax benefit opportunities for you.
- The BEPB can assist with meeting your diversity employment goals.