Minority entrepreneurs are one of the driving forces of the US economy, and it is growing well through federal initiatives and IRS support. If you are a minority and going to begin your entrepreneurial journey, you can find out everything about IRS support and other programs here.
The IRS does not have a direct grant or program for minority entrepreneurs, but has credits and tax reliefs to bring better opportunities for minorities. The Work Opportunity Tax Credit supports the targeted group to get opportunities.
The Small Business Administration is one of the agencies that offers support to minority entrepreneurs and disadvantaged individuals. IRS also works with SBA and MBDA to support small businesses and startups.
What IRS programs support minority entrepreneurs in 2025?
As we mentioned earlier, the IRS does not directly support minority entrepreneurs through grants or business development programs, but the agency plays an important role in helping them get some tax relief and assistance that can save their hard-earned money.
Such IRS initiatives help the business to grow well and get opportunities to evolve and learn. Let’s see what the IRS tax credits, incentives, and deductions that minority entrepreneurs can look at and take advantage of:
- Work Opportunity Tax Credit:
- The entrepreneurs get this credit if they hire employees from the targeted groups under the Section 51 code.
- The credit will be equal to the first and second salaries you paid to employees from the targeted groups.
- New Market Tax Credit:
- The IRS offers tax incentives to businesses investing in low-income rural and urban communities.
- So you can attract qualified equity investment if you are a qualified community development entity.
- The business gets 39% of the investment and can claim the credit for seven years; hence, it’s a great opportunity for minority entrepreneurs to grab an investment from businesses.
- Empowerment Zone Credits:
- If you have business in a distressed area and hire an employee for that area, you can receive the wage credit of $3000 annually for each employee from that qualified area.
Apart from this, the IRS has many business credits that you can check out and see if you are eligible for them based on the business sector, the services you provide to the employees, and others.
What is IRS Online learning for small businesses?
Apart from the tax relief, the IRS also offers guidance and education for small businesses that minority entrepreneurs can take advantage of, especially when they are already struggling with tax rules and can’t get help from professional companies due to a tight budget:
- Workshops and Seminars: IRS conducts small business tax workshops, seminars, and meetings from time to time to help entrepreneurs and businesses understand their tax responsibilities.
- Tax Advocate Services: The IRS offers support to entrepreneurs through the TAS if they are facing any system barriers, tax disputes, or delays, and helps them in meeting their tax liabilities.
- Guidance and Resources: The IRS has publications and educational resources guiding small businesses and entrepreneurs on how to navigate the tax system, such as Publication 583 for starting a business and keeping records, Publication 535 for Business expenses, etc.
What are other federal programs for minority entrepreneurs?
If you are a minority and starting a business, you can get the needed support from the following federal programs:
- SBA Business Development Program:
- SBA supports the businesses by limiting the competition for certain business contracts participating in the federal marketplace.
- The Section 8(a) program can get business opportunity Specialist support to navigate the federal legal talks and contracting.
- The SBA offers technical and management assistance to entrepreneurs, such as counseling, business training, marketing assistance, and others.
- You can participate in this program if you have a small business and meet the following criteria:
- have not participated in the Section 8(a) program before,
- have a net worth of $850,000 or less, or gross income of $400,000 or less, or assets of $6.5 million or less.
- MBDA grants:
- The Minority Business Development Authority offers grants to support businesses through MBDA grants.
- The local business can take advantage of the grants, access the technical assistance, capital, and other support from the agency.
- SBA Mentor-Protege Program:
- SBA also offers the Mentor-Protege program that allows small businesses to get a valuable mentor to help in business development and to secure government contracts.
What are the challenges for minority entrepreneurs?
Minority entrepreneurs may face more difficulty than the regular business; let’s see what they are:
- Access to Capital: Sometimes, minorities may face the issue of not having enough capital to start a business and less collateral.
- Investment opportunities: The minority entrepreneurs may sometimes have problems with visibility or investment opportunities that may cause trouble and demotivate them from starting a business.
- Discrimination: Societal discrimination can sometimes be seen in the business world as well, which affects business growth.
- Education and Wealth: The minority, due to previous policies, may not have enough education or resources to gain the people’s trust in their business or create a system barrier for them.
The US federal agencies have much support for the minorities planning to do business, so that they can grow and be encouraged to build something of their own.
