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Tax Incentives Small Businesses Can Claim in 2023

2023 will bring some exciting and lucrative tax incentives for small and medium businesses across America. Taking advantage of these opportunities can significantly impact your business’s bottom line, so it’s essential to stay informed about the incentives available. Here are some of the top tax credits and deductions for SMBs this year:

R&D Tax Credit

The most valuable permanent incentive that is available to businesses is the Research and Development (R&D) Tax Credit. This government-supported program is designed to help businesses increase technical jobs in America by encouraging them to invest in innovation through research and development activities. It applies to almost all industries, from manufacturing to software development, making it an attractive option for businesses looking for a way to reduce their taxes.

The credit is calculated based on wages earned by employees performing qualifying work, so the more staff members involved, the higher the potential savings. It can also be claimed at federal and state levels, with over 30 available state credits.

A good example of this is an engineering company that developed high-performance electronic connectors for its customers and claimed R&D credit for $844,000 in federal tax credits. Later, we identified additional state credits for them, and the combined federal and state R&D credits nearly doubled to $1,600,000 for them.

The Employee Retention Credit

The Employee Retention Credit (ERC) is the largest tax incentive available to nearly all businesses, including non-profits. The credit can provide up to $26,000 per employee. To qualify, businesses must either have faced a decline in revenue or were forced to modify their operations due to government orders. If a business, its suppliers, or clients were forced to socially distance, reduce hours, or limit capacity, the business could qualify. In fact, even those that claimed PPP and had no decline in revenue are also eligible for this benefit, as was the case with a Texas-based family-owned restaurant that secured $462,000 cash refunds for being similarly placed.

Section 179D

An example of how significant Section 179D deduction can be, is a construction management company qualified for $7.6 million deductions for 31 projects, including K-12 schools, college buildings and military facilities.

It’s worth noting that alliantgroup recently became the only provider with its 179D process fully validated by the U.S. Tax Court. Our team performs the entire 179D process, including obtaining allocation letters, certification of projects, identification of designers, and energy modeling.


The Earned Income Tax Credit (EITC) will continue in 2023 as a valuable incentive for lower-income earners across the United States. This refundable tax credit helps reduce taxes owed by lower-income individuals and families who meet specific requirements based on their earnings level throughout the year. With more significant credits available when dependents are involved, such as children or disabled relatives living at home.


The Work Opportunity Tax Credit (WOTC) encourages businesses that hire individuals from certain target groups into permanent employment by reducing their federal income tax liability by up to $9,600 per eligible employee hired.

Eligible target groups include veterans, long-term unemployed individuals, ex-felons, and people from economically disadvantaged backgrounds. If you’re looking for more diverse hires and would like a great incentive, consider taking advantage of this incentive.

A multi-state general contractor that partnered with alliantgroup claimed $220,000 in WOTC, while another food manufacturer saved $50,000 with our assistance.

Experience Matters

While these credits are easily the best options for businesses to leverage, they do require proper documentation. We recommend working with a trusted provider to take full advantage of these credits. alliantgroup is the most trusted tax incentive provider. For the past 20 years, alliantgroup has built a team of experts, including former policymakers, industry experts, IRS Commissioners, and Division Commissioners, to ensure our clients maximize their credits while properly substantiating claims.

Our tax experts and professionals have an extensive understanding and unique expertise in navigating the various federal and state agencies required to prepare claims and effectively and efficiently manage the process. This is how we have served 27,000 clients and partnered with over 4,500 CPA firms.

Get in touch with us to understand how you can leverage these incentives.