Maximizing a $50,000 Small Business Tax Credit for Startups - Good policy or vapor?

Vice President Kamala Harris is proposing to increase the small business tax credit from $5,000 to $50,000, which is intended to help new businesses cover the average $40,000 cost to launch. Here's how a new business owner might take advantage of this proposed tax credit:

How the $50,000 Tax Credit Could Work:

1. Claiming the Credit:
2. Refundable vs. Non-Refundable:
3. Eligibility Criteria:

Can They Get the Full $50,000 Credit?

• Yes, potentially. If the business has enough expenses or qualifies under the terms of the credit, a new business could claim the full $50,000 credit to offset taxes or even receive a refund, depending on whether the credit is refundable or not.
• However, if the credit is non-refundable and their tax liability is less than $50,000, they would not receive the full benefit in the first year. In this case, they may be able to carry the unused portion forward to future tax years.

What to Watch For:

• Final Legislation: Since this is a policy proposal, the final details of the tax credit (including whether it's refundable or non-refundable, eligibility requirements, and any limitations) will determine how much of the credit a new business can claim.
• IRS Guidelines: Once the policy is implemented, the IRS will provide detailed guidelines on how to claim the credit, including any documentation needed to prove eligibility.

In summary, if this proposal were enacted and the credit is refundable, new business owners could likely receive the full $50,000 credit, even if their tax liability is lower. If non-refundable, the benefit would depend on their tax liability but could still help substantially offset costs in the first year. According to Embroker, about 40% of startups are profitable year one, while it can take 2-3 years for many to start turning a profit. Good policy, or vapor? What is your take on VP Harris' proposed campaign policy?