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General business credit refers to a group of individual tax credits contained on IRS form 3800 for which a business may be eligible. These credits are accessible to any business owner, either directly (as is the case for self-employed individuals or rental property owners), or indirectly through the business administrators (as is the case for S-corps, estates, trusts and partnerships.)
Form 3800 summarizes all of the various tax credits, and contains provisions for businesses that have a carryback or carryforward from any of the following credits, or are in a business for which you receive passive income without having to perform any of the labor (including rental property ownership). These general business credits include:
Biodiesel fuel usage (Form 8864): credit is distributed to users of biodiesel or similar products per gallon used
Alcohol as a fuel (Form 6478): credit is distributed to users of ethanol and methanol per gallon used
Contributions to Community Development Corporations (For 8847): a 5% credit is granted to businesses that make contributions to their CDC.
Credit for Employee Social Security and Taxes on employee tips (Form 8846): credit is given equal to the employer’s part of the taxes in payroll on tips paid to employees.
Credit for Employer Childcare Services (Form 8882): a 25% is given for expenditures of qualified childcare facilities for employees, and 10% for expenditures involved in helping them find ing childcare facilities.
Credit for Increasing Research Activities (Form 6765): a credit of 20% of the base amount of research expenditure can be granted, provided that it is demonstrated that the research is leading the business to improvement.
Small Employer Pension Startup Costs (Form 8881): 50% of costs and no more than $500 per year is paid for starting employees up with 401(k) plans.
Disabled AccessCredit (Form 8826): A business can take 50% of the expenses up to $10,000 in providing access to disabled persons in compliance with the Americans with Disabilities Act of 1990.
Indian Employment Credit (Form 8845): Credit is given in the amount of 20% of the increase in qualified wages and health care costs to members of an Indian tribe.
Low Sulfur Diesel Fuel Production Credit (Form 8896): this is a credit for $.05 per gallon of low sulfur diesel fuel produced by the small business.
Renewable Electricity Production Credit (Form 8835): credit is given for producers of alternative energy as cents per kilowatt-hour. This includes a number of qualified energy forms such as wind, animal waste, solar, refined coal, small irrigation power and solid municipal waste.
General business credit is an excellent way to help businesses provide for society by adding incentives to socially responsible behavior. Many of the green acts and welfare acts that we are familiar with today come through general business credits, and similar tax credit functions.
