Table of Contents

What Is Form 3800: General Business Credit?

By

澳洲幸运5官方开奖结果体彩网:Julia Kagan

Updated August 19, 2024

Reviewed by

Ebony Howard

Part of the Series

Tax Deductions and Credits Guide

Understanding Tax Breaks

Tax Credits

Tax Credits for Parents/Students/Dependents

Tax Deductions

Tax Deductions for Real Estate

Tax Deductions for Retirement Savings

What Is the General Business Credit?

The general business credit (GBC) is the aggregate value of individual tax credits a business claims during a tax year. It consists of carryforward credits from previous years plus the current year's total business credits. Because it's a tax credit, not a 澳洲幸运5官方开奖结果体彩网:tax deduction—the amount comes directly off the tax bill.

To claim multiple business tax credits on your tax return, filers must attach , General Business Credit, and the IRS forms for the individual credits.

Key Takeaways

The general business credit is the total value of all tax credits a business claims for a tax year.
To claim more than one business credit, filers must report the total on Form 3800.
Many business tax credits may be included in Form 3800, including the investment credit, low-income housing credit, and the credit for small employer health insurance premiums.

Types of Tax Credits

The general business tax credit is not a single, separate credit. It is a collection of 澳洲幸运5官方开奖结果体彩网:tax credits that promote various business activities, including research, oil recovery, reforestation, and starting a 澳洲幸运5官方开奖结果体彩网:pension plan.

Filers claim the individual tax credits on their relevant 澳洲幸运5官方开奖结果体彩网:tax forms and carry over the resulting combined credit to the General Business Credit to determine the overall allowable credit. As of 2024, some common credits businesses claim include:

澳洲幸运5官方开奖结果体彩网:Work opportunity credit ()
Credit for 澳洲幸运5官方开奖结果体彩网:small employer health insurance premiums ()
Employer credit for paid family and medical leave ()
Low-income housing tax credit ()
Disabled access credit ()
Credit for employer-provided child care facilities and services ()
Credit for small employer pension plan startup costs ()
Credit for employer Social Security and Medicare taxes paid on certain employee tips ()

Tip

To claim multiple business tax credits, taxpayers fill out the appropriate IRS form for each tax credit and then carry the🀅 total to Form 3800, General Business Credit.

Accounting Rules

The general business tax credit is a nonrefundable credit that directly reduces a tax bill. However, as a nonrefundable credit, it reduces the tax liability to zero. Any credit amount that remains beyond that is forfe♐ited.

If part or all of the general business credit cannot be used due to the tax liability limit, taxpayers can generally carry the unused credit back one year. Different rules apply for some credits, including oil and gas production credits. General business credits are treated as 澳洲幸运5官方开奖结果体彩网:first-in, first-out (FIFO). Therefore, the order businesses use credits in any tax year is:

Carryforwards to that year, the earliest ones first;
The general business credit earned in that year; and
The carryback to that year.

Warning

Some tax credits have expiration dates. Be sure to check the instructions for each credit to make sure it's available for the applicable tax year.

Are There Income Limitations for General Business Credits?

The general business credit has limits. Taxpayers should add their net income tax and alternative minimum tax. From that sum, subtract the greater of the tentative minimum tax for the tax year or 25% of the amount of their regular 澳洲幸运5官方开奖结果体彩网:tax liability that exceeds $25,000 ($12,500 for married taxpayers filing separately, but only if both of them qualify for the credit) If one spouse has no current or unused credit, the other spouse may use the entire $25,000 in determining their credit for the tax year.

Which Tax Credits Are Included in the General Business Credit?

A is available on the IRS website which includes investment credit, work opportunity credit, low-income housing credit, empowerment zone employment credit, credit for small employer pension plan startup costs, credit for employer-provided childcare facilities and services, energy-efficient home credit, alternative motor vehicle credit, credit for small employer health insurance premiums, and the employer credit for paid family and medical leave.

Which Businesses Are Eligible for the General Business Credit?

According to the IRS, an eligible small business can be a non-publicly traded corporation, partnership, or sole proprietorship. The entity's average annual gross receipts during the prior three tax years can't exceed $50 million. If the business is less than three years old, base the average yearly gross receipts on the period the entity has existed.

The Bottom Line

Form 3800 is used to compile all tax credit information for eligible businesses. General business credit consists of carryforward business credits from prior years plus current-year business credits.

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