4.
General Business Credit
See chapter 12 for information
about getting publications and
forms.
All of the following credits
are part of the general business
credit. The form you use to
figure each credit is shown in
parentheses. Be sure you also
read
How To Claim the Credit,
later, because you may also have
to fill out Form 3800 in certain
situations.
Biodiesel
fuels credit (Form 8864)
This credit applies to
fuel produced, sold or used
after December 31, 2004, in
taxable years ending after
such date. For more
information, see Form 8864.
Credit for
alcohol used as a fuel (Form
6478).
This credit applies to
alcohol you sold or used as
fuel. Alcohol, for purposes
of this credit, includes
ethanol and methanol. It
does not include alcohol
produced from petroleum,
natural gas, coal, or peat.
For more information, see
Form 6478.
Credit for
contributions to selected
community development
corporations (Form 8847).
This credit applies to
certain contributions made
to a selected community
development corporation
before June 30, 1999. For
more information, see Form
8847.
Credit for
employee social security and
medicare taxes paid on
certain employee tips (Form
8846).
The credit is generally
equal to your (employer's)
portion of social security
and Medicare taxes paid on
tips received by employees
of your food and beverage
establishment where tipping
is customary. The credit
applies regardless of
whether the food is consumed
on or off your business
premises. However, you
cannot get credit for your
part of social security and
Medicare taxes on those tips
that are used to meet the
federal minimum wage rate
that applies to the employee
under the Fair Labor
Standards Act. For more
information, see Form 8846.
Credit for
employer-provided childcare
facilities and services
(Form 8882). This
credit applies to the
qualified expenses you paid
for employee childcare and
qualified expenses you paid
for childcare resource and
referral services. The
credit is 25% of qualified
expenses you paid for
employee childcare and 10%
of qualified expenses you
paid for childcare resource
and referral services. This
credit is limited to
$150,000 each year. For more
information, see Form 8882.
Credit for
increasing research
activities (Form 6765).
The research credit is
designed to encourage
businesses to increase the
amounts they spend on
research and experimental
activities. The credit is
generally 20% of the amount
by which your research
expenses for the year are
more than your base amount.
For more information, see
Form 6765.
Credit for
small employer pension
startup costs (Form 8881).
This credit applies to
pension plan startup costs.
If you begin a new qualified
defined benefit or defined
contribution plan (including
a 401(k) plan), SIMPLE plan,
or simplified employee
pension, you can receive a
tax credit of 50% of the
first $1,000 of qualified
startup costs. For more
information, see Publication
560, Retirement Plans for
Small Business (SEP, Simple,
and Qualified Plans).
Disabled
access credit (Form 8826).
The disabled access credit
is a nonrefundable tax
credit for an eligible small
business that pays or incurs
expenses to provide access
to persons who have
disabilities. You must pay
or incur the expenses to
enable your business to
comply with the Americans
with Disabilities Act of
1990. For more information,
see Form 8826.
Empowerment
zone and renewal community
employment credit (Form
8844).
You may qualify for this
credit if you have employees
and are engaged in a
business in an empowerment
zone or renewal community
for which the credit is
available. For more
information, see Form 8844
and Publication 954.
Enhanced
oil recovery credit (Form
8830).
This credit applies to
your qualified enhanced oil
recovery costs for the tax
year. For more information,
see Form 8830.
Indian
employment credit (Form
8845).
This credit applies to the
part of the qualified wages
and health insurance costs
(up to $20,000 per employee)
you paid or incurred during
a tax year that is more than
the sum of the comparable
costs you (or your
predecessor) paid or
incurred during calendar
year 1993. The employee must
be an enrolled member, or
the spouse of an enrolled
member, of an Indian tribe.
The employee must perform
substantially all of his or
her services within an
Indian reservation while
living on or near the
reservation. For more
information, see Form 8845
and Publication 954.
Investment
credit (Form 3468).
The investment credit is
the total of the following
three credits.
Energy
credit.
This credit applies to
certain expenses for solar
or geothermal energy
property you placed in
service during the tax year.
For more information, see
the instructions for Form
3468.
Reforestation credit.
The reforestation credit
applies to part of the
expenses you incur each year
to forest or reforest
property you hold for
growing trees for sale or
use in the commercial
production of timber
products. This credit has
been repealed for expenses
paid or incurred after
October 22, 2004. For
information about these
expenses, see chapter 9 in
Publication 535, Business
Expenses.
Rehabilitation credit.
This credit applies to
expenses you incur to
rehabilitate certain
buildings. For more
information, see the
instructions for Form 3468.
Low sulfur
diesel fuel production
credit (Form 8896).
This credit applies to
expenses paid or incurred
after December 31, 2002, in
taxable years ending after
such date. For more
information, see Form 8896.
Low-income
housing credit (Form 8586).
This credit generally
applies to qualified
low-income housing buildings
placed in service after
1986. For more information,
see Form 8586.
New York
Liberty Zone business
employee credit (Form 8884).
This credit provides
businesses with an incentive
to hire individuals from a
new targeted group of
employees in the Liberty
Zone. This credit expired
for wages paid or incurred
for work performed after
December 31, 2003. For more
information, see Form 8884.
Orphan drug
credit (Form 8820).
The orphan drug credit
applies to qualified
expenses incurred in testing
certain drugs, known as “
orphan
drugs for rare diseases and
conditions.” For more
information, see Form 8820.
Renewable
electricity and refined coal
production credit (Form
8835).
For more information on
the renewable electricity
and refined coal production
credit, see Form 8835.
Welfare-to-work credit (Form
8861).
The welfare-to-work credit
provides businesses with an
incentive to hire long-term
family assistance
recipients. For more
information, see Form 8861
and Publication 954.
Work
opportunity credit (Form
5884).
The work opportunity
credit provides businesses
with an incentive to hire
individuals from targeted
groups that have a
particularly high
unemployment rate or other
special employment needs.
For more information, see
Form 5884 and Publication
954.
To claim a general business
credit, you will first have to
get the forms you need to claim
your current year business
credits.
In addition to the credit
form, you may also need to file
Form 3800. See the next
discussion to decide whether you
need to file Form 3800.
Who must
file Form 3800?
You must file Form 3800 if
any of the following apply.
- You have more than
one of the credits
listed above (other than
the empowerment zone and
renewal community
employment credit (Form
8844), New York Liberty
Zone business employee
credit (Form 8884), or
renewable electricity
and refined coal
production credit (Form
8835, Section B)).
- You have a carryback
or carryforward of any
of these credits (other
than from Form 8844,
Form 8884, or Section B
of Form 8835).
- Any of these credits
(other than the amount
from Form 8586, Form
8844, Form 8884, or
Section B of Form 8835)
is from a passive
activity. For
information about
passive activity
credits, see Form
8582-CR.
Claiming
the empowerment zone and
renewal community employment
credit. The
empowerment zone and renewal
community employment credit
is subject to different
rules. The credit is figured
separately on Form 8844 and
is not carried to Form 3800.
For more information, see
the instructions for Form
8844.
Claiming
the New York Liberty Zone
business employee credit.
The New York Liberty Zone
business employee credit is
subject to different rules.
The credit is figured
separately on Form 8884 and
is not carried to Form 3800.
For more information, see
the instructions for Form
8884.
Claiming
the renewable electricity
and refined coal production
credit. The part of
the credit figured in
Section B of Form 8835 is
subject to different rules.
The amount figured in
Section B is not carried to
Form 3800. For more
information, see Form 8835.
Alternative
minimum tax (AMT).
Although you may not owe
AMT, you must still figure
your tentative minimum tax
on Form 6251 if you claim a
general business credit.
After you fill in Form 6251,
attach it to your tax
return.
