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Tax Benefits for Woman Owned Business

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tax benefits for woman owned business

Have you been missing the tax benefits for woman owned business that the government provides? Women entrepreneurs can compete for any contract or government benefit, but some benefits are exclusively reserved for women. 

The government requires at least 25 percent of its contracts to be rewarded to small businesses; of that, the 5 percent should be distributed to women-owned businesses. The federal government offers concessions on tax and credit opportunities to women-owned businesses. Generally, the tax concessions and credit programs are designed for minority-owned businesses to support their ventures. This helps to boost their participation in the industry and society.

However, claiming a women-owned business tax credit requires certain certifications. Let us see what this certificate is and how you can avail the tax benefits for female-owned businesses. Bookmark this page so you can open it anytime you want to apply for or check about tax breaks, loans, and other benefits.

Advantages For Women Owned Business – Tax Breaks, Credit, and More

The government is keen on ensuring that women prosper in the business sector. To support that, it offers several benefits like tax breaks, grants, mentoring and training, loans, and credit opportunities to support that. 

Let us take a closer look at these advantages that women-owned businesses can claim.

Tax Breaks

Do female-owned businesses get tax breaks and benefits?

The government offers huge tax breaks for woman-owned businesses. Moreover, several credit programs offer extra advantages. Here are some salient opportunities for women-owned businesses you should definitely check out before tax planning.

1. Small Business Health Care Tax Credit

This is a benefit available for women-owned business employers who pay the health insurance of their employees. However, only employers who have employed less than 25 Full-time employees or equivalent and pay less than USD 54,000 are eligible for the above.

  • The credited amount will be less than or up to 50 percent of the employer’s contribution to the insurance. 
  • It depends on the total number of full-time employees and their wages.

2. Child and Dependent Care Tax Credit

The government offers a woman-owned business tax credit of a maximum of USD 3000 for one child or dependant.

3. Home Office Deduction

The federal government provides tax benefits for woman-owned businesses that use their home for business. The credit rate is USD 5 for every square foot in use, and you can apply for a maximum of 300 square feet.

4. Self-employment Tax Deduction

The state government offers tax deductions for self-employed individuals in their state. We recommend you check out the tax deduction program and criteria for your state.

5. State-level Tax Incentives

The state government offers tax incentives for self-employed individuals in their state. You should check out the deduction program and criteria for your state.

Advantages For Women Owned Business Tax Benefits


The federal and state government offers grants for female-owned businesses to promote new job creation. Therefore, keep your eyes open for government grants like:

  • SBA (Small Business Administration) grants
  • NSF (National Science Foundation) grants
  • National Institute of Standards and Technology (NIST)
  • EDA (Economic Development Administration) grants

WBE Certifications for Woman-Owned Businesses

The women entrepreneurs and businesswomen have plenty of certifications to apply for that can open the gate of opportunities for them. Certificates issued by Women-Owned Small Business (WOSB) and Women’s Business Enterprise (WBE) are among them. Let us look at these certifications in detail.

Women’s Business Enterprise (WBE): 

The Women’s Business Enterprise National Council (WBENC) issues the certificate for Women’s Business Enterprise (WBE). The federal government and private organizations seek this certification when they are looking to work with a woman-owned business. 

Therefore, get your WBE certificate issued to become eligible for tax benefits for female-owned businesses.

Women-Owned Small Business (WOSB):

Federal organizations seek the Women-Owned Small Business (WOSB) certificate when working with women-owned companies. Moreover, there is a special type of WOSB certificate called the Economically Disadvantaged Women-Owned Small Business (EDWOSB) certificate. It is issued to economically disadvantaged women who meet the specific criteria.

Therefore, before you look to gain tax benefits for woman-owned businesses, ensure that you have the above certificates.

Who is Eligible for the Women’s Business Enterprise (WBE) Certificate?

The WBE certificate has certain eligibility criteria that you must fulfill before you can apply.

  • The business must be 51 percent or more owned by a woman or a group of women. 
  • The woman or this group of women should have contributed the capital amount corresponding to their ownership percentage to gain ownership.
  • The organization or operation should be for-profit and based in the USA.
  • The owner women in the context above should be US citizens or legal residents.
  • The business should be led by a board containing a woman or a group of women.

Check out the documentation requirement for the WBE certificate to claim the tax benefits for female-owned businesses.

The certification costs are according to the annual gross revenue of the company at the time of application. It can range from USD 350 per year (for under USD1 million) to USD 1,250 per year (for over USD50 million.)

Top Benefits of Women’s Business Enterprise Certificate

The Women’s Business Enterprise Certificate (WBE) opens up opportunities for a woman-owned business. With the WBE certificate issued, the female-owned business can:

  • Work with private and government organizations seeking to work with only women-owned companies.
  • Access a pool of suppliers and procurement contracts available only to women-owned businesses.
  • Participate in the events organized for female-owned business networks.
  • Become a part of the WBENCLink2.0 online network database of female-owned companies.
  • Take help from the mentorship programs, training, sponsorships, and leadership events.
  • Develop links with female entrepreneurs by becoming part of women-owned business events and networks.
  • Eligibility to use the WBE seal on the marketing materials and to win national and regional recognition.

Loans For Woman-Owned Businesses

One can generate the Prequalification Pilot Loan Program and benefit from the loans for women-owned businesses. Intermediaries like Small Business Development Company and the Women’s Business Development Center can assist you with the loan application. 

The Prequalification Pilot Loan Program takes the help of intermediaries to select suitable women-owned businesses to sanction loans. After the loan package is created, it must be submitted to the SBA. You can expect to get a response in three business days. The USD 250,000 is the maximum amount that can be provided in SBA.

An intermediary can help you avail of loans from other competitive lenders. In addition, women-owned companies can benefit from grants and contracts from governments and private organizations.

Minority-Owned Businesses and Benefits

As per the constitution, minority groups are certain populations who are few in number. These include women, Asian Americans, American Indians, Hispanics, Alaskan Natives, and African-Americans. When 51 percent or more ownership of a company lies in the hands of a minority group, the business is termed a minority-owned business. 

The US Constitution supports minority-owned businesses and wants them to thrive. 5.8 million in 2006 were minority-owned businesses, which was a 46 percent increase from 2002.  These minority-owned businesses are eligible for tax incentives and small business tax deductions offered by the state and federal governments.

What are the Eligibility Criteria to Qualify as Minority-Owned Businesses?

Minority business is a vague term until specified; therefore, the government has its criteria to decide which companies or ventures qualify as minority businesses.

  • The business should be 51 percent or more minority or women-owned.
  • The business should be a for-profit organization in the USA.
  • The business should have a physical location in the US or its territories.
  • Most of the ownership should be in the hands of minority groups who are a citizen of the USA or legal residents.

Once you are sure your business qualifies as minority-owned, the next step is applying for the certificate.

How to Apply for a Minority-Owned Business Certificate?

It is time-consuming, from applying to receiving the minority-owned business certificate. Therefore, you should do it in advance if you are planning something for your company in the coming months. It takes up to three months to receive the certificate. 

To start with the certification process, contact the National Minority Supplier Development Council (NMSDC). The organization is known for providing opportunities to minority and women-owned businesses. You will need to provide several documents of your company or business. 

Once you receive the certificate from NMSDC, you will be able to qualify for many government and private-run programs. You can find government and private contracts in the supplier base of the NMSDC and benefit from them. Additionally, keep in touch with the regional agencies as they bring various procurement opportunities.

6 Benefits of Being a Woman-Owned Business

1. Women-Owned Small Business Federal Contracting Program

There is a program called the U.S. Small Business Administration that helps women-owned businesses with unexplored business opportunities.
The Federal Contracting program actively designates that minority-owned businesses exclusively receive five percent of the contracts. It is a fact that every contract has its requirements and requires firms to bid on the contracts in their area of interest. Undoubtedly, you get more opportunities in the absence of the masses.

2. Emerging Leaders Initiative

The Emerging Leaders Initiative actively encourages all minorities, including professional women, to apply. ELI focuses on providing necessary resources to underserved communities, including women, for their small businesses. Aspiring business people and established businesses can apply for this program with the condition of having at least one employee apart from the former. Additionally, you must have revenue of amount $250,000. This program covers business training sessions for you with one-on-one counseling focussing on the growth of the business, government contracting, accessing capital, and more. The foundation of this program is actively based on helping small business owners, with a particular emphasis on ensuring that women enjoy the benefits of this initiative.

3. New Markets Tax Credit

Women-owned enterprises that serve economically disadvantaged areas might qualify for a new market tax credit, one of the many tax benefits for women-owned businesses. When calculating the credit, it depends on the project’s nature and the emerging market’s specifics. Three grants totaling over $98 million were given to Invest Detroit, leading the city’s reconstruction efforts. You can be eligible for far more credit than you now have, depending on the scope of your effort.

4. Research and Development Tax Credit (New York Residents)

Businesses in New York State that are actively applying, have an established research and development (R&D) facility, and meet the requirements receive a nine percent credit. The money should help start-ups and existing firms focusing on new technologies grow and flourish. The program actively includes capital investment and new jobs credits of $1,000 per employee after three years.

5. Small Business Loan Guarantee Program (SBLGP)

This is a loan guarantee program originated in California which aims to invest in communities with low income. This also helps generate more jobs in certain fields that lack the same. This program aims to help with business tax extension and credits and make a positive credit history. If you are a woman and decide to start a business in one of these communities, you will surely get benefits in the form of loans and funds.

6. Mom-Grants from Huggies Brand 

For many years, Huggies has backed entrepreneurial efforts spearheaded by women. To encourage the creation of novel items inspired by mothers nationwide, they offer an ongoing grant program that gives up to $15,000. In addition, the winners will have access to tools that help expedite the creation of their goods and the establishment of their businesses. Huggies is just one of several infant companies encouraging working mothers to pursue their careers and achieve financial independence.

Plan Your Taxes with Us!

Tax planning is vital for a business to ensure compliance with government regulations, avoid penalties, and asses your business growth. Moreover, careful tax planning reduces business liabilities and costs. Therefore, you must work with an experienced accountant, assess your company’s taxation, and make sure it is up to the mark.

Connect with an expert professional for business tax planning and preparation. Dial 1800 580-5375 now!

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