Businesses and Jobs

CFED supports and works in coalition to expand existing federal programs that support microenterprise organizations including SBA Microloan, PRIME, Women's Business Centers, the Community Development Financial Institutions (CDFI) Fund, the USDA's Rural Business Enterprise Grants and Intermediary Relending programs, HHS' Job Opportunities for Low Income Individuals, and the Community Development Block Grant.

For more information, visit CFED's Advocacy Center.

Since nearly all enterprises start out as unincorporated entities and initially report business income using standard individual Form 1040 Schedule C, entry items from these forms can be used to craft precise tax credit or deductions which would assist new businesses' with start-up costs while also stabilizing the business tax experience for first-time filers. These reforms are likely to encourage higher rates of tax compliance in earlier phases of the business development process, resulting in more timely collection of both income tax revenues and Social Security and Medicare payments.

For more information, visit the SETI Public Policy page.

Many of our country's lowest income workers turn to self-employment as a means to create a job or to supplement a low-wage job. However, too often federal programs that support these individuals – by providing a safety net or workplace skills – fail to recognize that self-employment can and should be an option. CFED supports and advocates for the following policy recommendations:

• Reform the asset means tests in public assistance programs
• Promote microenterprise as an eligible activity for recipients of Temporary Assistance for Needy Families (TANF) and Social Security Disability Insurance.
• Encourage microenterprise as a prisoner re-entry strategy.
• Expand matched savings accounts for business capitalization.

CFED supports expanding CRA to require the reporting of small business loans, allowing individuals to access their retirement accounts for business, improving enforcement of the HUB Zone program and small business contracting targets.

Opportunities to assist new and emerging business owners will be facilitated by encouraging the IRS to actively extend the capacity of its successful VITA program to serve low-income taxpayers with self-employment income. Currently many IRS offices discourage or forbid volunteers from filing Schedule C self-employment returns. Additional policy changes supported by CFED include requiring “community VITA” appropriations be used to establish VITA demonstration projects to serve low-income, self-employed households and requiring the IRS Small Business/Self-Employment division to expand its “first-time filer” initiative through “get your business right” demonstration projects that would explore how the IRS and nonprofits can better serve this constituency.

CFED also supports extending the Making Work Pay Tax Credit. The President requested funding to extend this credit beyond 2009 and 2010. Making Work Pay is a refundable tax credit equal to 6.2% of earned income up to a maximum of $400 single filer/$800 joint filer. The credit is available to self-employed individuals.

Under our current health insurance system, small business owners, and microenterprise and low-income business owners in particular, struggle to pay for coverage for themselves and their employees. Research has found that illness and other health concerns often contribute to the closure (or failure to open) of businesses owned by low-income entrepreneurs.

CFED works in coalition to advocate for continued/expanded appropriations for the following microenterprise programs:

• Microloan
• Microloan TA
• PRIME
• Women's Business Centers
• CDFIs
• USDA programs
• Office of Refugee Resettlement Microenterprise Program
• Office of Refugee Resettlement IDA Program
• Assets for Independence IDA Program

Very small businesses, or microenterprises, are a proving ground for new entrepreneurs and a key income generation and economic revitalization strategy. Microenterprises increase income for the poor, help people move out of poverty and off of public assistance and help poor households build both business and personal assets over time. Of the estimated 20 million Americans who operate microenterprises, at least half face disadvantages in establishing and operating their own businesses—including women, minorities, low-income individuals and people with disabilities. States should provide funding and support to programs that help these individuals succeed as entrepreneurs.

For more information, click here: State Microenterprise Support. Download the State Microenterprise Support Policy Brief here.

• Ease business licensing process for new entrepreneurs
• Fund business incubators
• Provide grants and forgivable loans to businesses for expansion
• Fund organizations that provide technical assistance to entrepreneurs
• Integrate self-employment tax preparation help into existing free/low-cost tax prep services

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