According to House Majority Leader Steny Hoyer (Dem) the U.S. House of Representatives will vote on the Small Business Jobs Bill next week.  HR 5297 was passed by the Senate earlier this week, and sent back to the House for approval.  It is believed that if the bill passes the House this time, it will also be signed by President Obama.

From Representative Hoyer’s press release:

Next week, we will take action on the Small Business Lending Act, which we are discussing with our Members. This bill will provide needed assistance to small businesses and help them expand and add jobs. There will be no votes in the House on Tuesday, September 21st. The House will meet for legislative business on Wednesday, September 22nd, at 2:00 p.m., with votes postponed until 6:00 p.m

As I mention in my post on Tuesday, this bill would provide a 5-year carryback for Work Opportunity Tax Credits and would expand the utilization of all other general business credits by removing limitations associated with the alternative minimum tax or AMT.

See other posts on this subject.

[Update 10-11-2011: Although the legislative summary by Senate Finance Committee does not mention this, the IRS website states that these provisions only apply to tax credit generated in 2010 or that was carried forward to 2010 from prior periods.  Here's the IRS language: 

"This is a one year initiative applicable only to the tax year 2010 (For fiscal year filers, the effective tax year is the first tax year beginning after December 31, 2009). The five-year carryback period is available only for credits carried forward to the tax year 2010 and/or earned in the tax year 2010"

End update]

[Update 10/24/2011:  The day after I posted the previous update above, the IRS changed the language I quoted, creating a much different picture of the tax credit available for carry back.  As of October 12, 2011 the IRS site reads : 

"This is a one year initiative applicable only to the tax year 2010 (For fiscal year filers, the effective tax year is the first tax year beginning after December 31, 2009). The five-year carryback period is available only for credits earned in the tax year 2010."

Note that it now explicitly states that only credit generated in tax year 2010 is able to be carried  back 5 years.

End update.]

The U.S. Senate has passed HR 5297, the Small Business Jobs Bill, by a vote of 61-37.  The bill, which will be highly beneficial to some of my clients, must now go back to the House of Representatives for reconsideration there.

If passed into law, this bill will include a number of provisions relevant to hiring-based tax incentives like the Work Opportunity Tax Credit and the federal Empowerment Zone Employment Credit.

First, it would allow for general business credits, including the Work Opportunity Tax Credit, to be carried back five years. In other words, if a small business generates more WOTC than it can use in 2010, that excess credit can be carried back and utilized against tax already paid in 2009, 2008, 2007, 2006, or 2005 — resulting in tax refunds.

The Senate Finance Committee’s summary explains as follows:

Under current law, a business’ unused general business credit may generally be carried back to offset taxes paid in the previous year, and the remaining amount may be carried forward for 20 years to offset future tax liabilities. This bill extends the one year carry back for general business credits to five years for certain small businesses. This applies to general business credits for those sole proprietorships, partnerships and non-publicly traded corporations with $50 million or less in average annual gross receipts for the prior three years.

Also, the use of general business credits would no longer be limited by the Alternative Minimum Tax or AMT.

Under the Alternative Minimum Tax (AMT), taxpayers may generally only claim allowable general business credits against their regular tax liability, and only to the extent that their regular tax liability exceeds their AMT liability. A few credits may be used to offset AMT liability, such as the credit for small business employee health insurance expense. This bill allows certain small businesses to use all types of general business credits against their AMT. This applies to general business credits for those sole proprietorships, partnerships and non-publicly traded corporations with $50 million or less in average annual gross receipts for the prior three years.

An important note here is that utilization of the Work Opportunity Tax Credit is ALREADY NOT subject to the AMT limitations. The federal Empowerment Zone Employment Credit, on the other hand, would gain greater application under this bill.

For all provisions, see the Senate Finance Committee’s summary of HR 5297.