Many federal business credits are grouped into the general business credit and claimed on Form 3800. The credit equals:
- Prior‑year carryforwards
- Current‑year credits
- Future carrybacks (if applicable)
The general business credit is nonrefundable. It can reduce tax liability only to the greater of:
- Tentative minimum tax, or
- 25% of regular tax above $25,000
Unused credits may be:
- Carried back 1 year (5 years for marginal well production)
- Carried forward 20 years
- Deducted when the carryforward period ends or when the entity ceases to exist
Credits Included in the General Business Credit
Below is a concise overview of the major credits included in Form 3800.
Alternative Fuel Vehicle Refueling Property Credit
Credit for qualified refueling property placed in service. Ends for property placed in service after June 30, 2026.
Alternative Motor Vehicle Credit
Credit amount depends on the year, make, model, and type of qualifying new vehicle (fuel cell or plug‑in electric).
Biodiesel, Renewable Diesel, and Sustainable Aviation Fuel Credit
Credit based on gallons of eligible fuel sold or used.
Biofuel Producer Credit
Credit for producing qualifying biofuels; amount varies by fuel type and gallons produced.
Carbon Oxide Sequestration Credit
Credit for capturing and storing or using carbon oxide at a qualified facility.
Credit for Employer Social Security & Medicare Taxes on Tips
Equal to the employer share of FICA taxes paid on employee tips in food and beverage establishments.
Credit for Employer Differential Wage Payments
For small businesses paying employees on active military duty for >30 days.
Credit for Employer‑Provided Childcare Facilities & Services
Credit equals:
- 25% of qualified childcare facility expenditures
- 10% of resource and referral expenditures
- Annual limit: $150,000
After 2025 (OBBBA):
- Credit increases to 40% (or 50% for eligible small businesses)
- Limit increases to $500,000 ($600,000 for eligible small businesses)
- Inflation adjustments begin in 2026
Credit for Increasing Research Activities (R&D Credit)
Regular credit equals 20% of increased qualified research expenditures.
Credit for Small Employer Health Insurance Premiums
Up to 50% of premiums paid. Employer must:
- Have <25 FTEs
- Pay average wages < $67,000 (2025)
- Pay ≥50% of employee premiums
Credit for Small Employer Pension Plan Start‑Up Costs
Available for the first 3 years of a new plan.
- Employers with 1–50 employees: 100% of costs up to $5,000
- Employers with 51–100 employees: 50% of costs up to $5,000
Disabled Access Credit
For eligible small businesses. Credit equals 50% of the first $10,000 of qualifying access expenditures.
Distilled Spirits Credit
For distillers, importers, and eligible wholesalers.
Empowerment Zone Employment Credit
Credit equals 20% of up to $15,000 of qualified wages. Extended through December 31, 2025.
Energy Efficient Home Credit
For contractors building qualified energy‑efficient homes. Credit ranges $500–$5,000 depending on standards met. Ends for homes acquired after June 30, 2026.
Foreign Tax Credit
Credit for foreign income taxes paid or accrued on income also taxed by the U.S.
Indian Employment Credit
Credit equals 20% of qualified wages and health insurance costs for qualified employees.
Investment Credit
Includes:
- Rehabilitation credit
- Energy credit
- Advanced coal project credit
- Gasification project credit
- Advanced energy project credit
Low Sulfur Diesel Fuel Production Credit
5 cents per gallon for qualified small business refiners.
Low‑Income Housing Credit
Credit for qualified low‑income buildings, generally over a 10‑year period.
New Markets Credit
Credit for equity investments in community development entities serving low‑income communities.
Nonconventional Source Fuel Credit (Carryforward Only)
Carryforward credit for qualified coke or coke gas produced and sold in prior years.
Orphan Drug Credit
Credit equals 50% of qualified clinical testing expenses for rare‑disease drugs.
Qualified Railroad Track Maintenance Credit
Credit for track maintenance by eligible regional and switching railroads.
Renewal Community Employment Credit (Carryforward Only)
Carryforward credit for prior‑year qualified wages in renewal communities.
Renewable Electricity, Refined Coal, and Indian Coal Production Credit
Credit for producing and selling qualifying energy resources.
Work Opportunity Credit
Credit for hiring employees from targeted groups. Credit equals:
- 25% of first‑year wages for 120–399 hours
- 40% of first‑year wages for ≥400 hours
- 50% of second‑year wages for long‑term family assistance recipients
Targeted groups include:
- Long‑term unemployed
- TANF recipients
- Veterans
- Ex‑felons
- SNAP recipients
- SSI recipients
- Designated community residents
- Vocational rehab referrals
- Summer youth employees
Extended through December 31, 2025.
Credit for Prior Year Minimum Tax (Form 8827)
Corporations with prior‑year AMT liability use Form 8827 to:
- Compute the minimum tax credit
- Determine any carryforward
Applies only to corporations with prior AMT.