How to determine if your Adjusted Gross Income is below the $350,000 threshold

The $350,000 Threshold for Adjusted Gross Income (AGI)

Among the many 8(a) business development program eligibility requirements the applicant for 8(a) Certification must have is an average AGI over the past three taxes years of less than $350,000.

What is the definition of Adjusted Gross Income?

Adjusted gross income (AGI) is a tax term for an amount used in the calculation of an individual’s income tax liability. AGI is calculated by taking the applicants gross income and subtracting their maximum allowable adjustments. AGI is located on line Line 7 for 2018 personal taxes, Line 8B for 2019 Taxes and Line 11 for 2020 personal taxes.

New HUBZone Principal Office Shared Coworking Space Rules

The SBA HUBZone Office has recently put out some new rules regarding shared office spaces.  While these new rules may seem stricter, it is actually good that they have put the policy in writing so that it is clear on what will qualify for your principal office and what will not.  For companies looking to lease a new space or apply to the HUBZone program, please follow the guidelines below and share this with your landlord so that your lease can include all required information.  This new policy should be posted to the SBA’s website soon.

8(a) Economic Dependency or the 70% Rule Explained

Do you have all your eggs in one basket? Economic Dependence is a significant obstacle to the eligibility of many applicants desiring to gain 8(a) Certification for their business. In fact, it is currently the #1 issue for which we have to turn the greatest number of potential 8(a) applicants away, until the issue is resolved.

Who counts as a Hubzone resident and how do you prove it?

By now you probably know that at least 35% of your total employees must reside in a HUBZone.  By total employees, we mean every single employee that works more than 40 hours a month, no matter where they work.  This means employees that work at your principal office, other office locations, jobsites, and remotely from home, all count towards that 35% that you must meet.

SBA 8(a) Program – Big News!

After a long time of anticipation, the SBA announced new 8(a) Eligibility Economic Disadvantage rules that go into effect on July 15, 2020. This exciting news will allow many more small business owners gain access to the SBA 8(a) Program.  See the except from Federal Register. Below are the new rules that will go into effect.

Adjusted Net Worth:
Currently the 8(a) Applicant must have an Adjusted Net Worth of less than $250,000, to become 8(a) certified and be deemed Economically Disadvantaged by the SBA. The new rule increases the 8(a) Applicant’s Adjusted Net Worth to $750,000 to become and remain 8(a) Certified.

Adjusted net worth = Assets – liabilities – (Equity in primary residence + value of ownership interest in business concern + IRA/401(k) or Other Retirement Accounts)

Five Eligibility Requirements to get SBA Hubzone Certified

If you would like a Hubzone Program eligibility analysis, please take our online hubzone eligibility questionnaire.

You are also welcome to review the basic eligibility requirements below. Generally, to be approved into the Hubzone Program you must meet these basic eligibility requirements:

Eligibility Criteria 1:
Your business concern’s principal office must be located in a qualified SBA designated Hubzone. Search the SBA’s Mapping system and verify if your principal office is located in a qualified SBA designated Hubzone.