The General Business Credit (Form 3800) combines several business-related tax credits into one total credit that can reduce the amount of tax you owe. These credits are designed to encourage activities that benefit the economy, support innovation, or promote environmental sustainability.
Common credits reported through Form 3800 may include credits for:
- Research and development activities
- Renewable energy investments or production
- Low-income housing investments
- Hiring individuals from certain targeted groups
- Other qualifying business activities authorized by tax law
Who Can Claim the General Business Credit?
Eligibility depends on the specific credit being claimed. In general, you may qualify if you are:
- A sole proprietor
- A partner in a partnership
- An S corporation shareholder
- A business owner engaged in qualifying activities
- An individual taxpayer entitled to certain business-related credits
Because Form 3800 is a summary form, you'll typically need to complete the individual credit forms first and then carry the amounts to Form 3800.
Is the General Business Credit Refundable?
Generally, the General Business Credit is nonrefundable. This means it can reduce your tax liability to zero, but you usually won't receive a refund for any unused portion of the credit.
However, unused credits may be eligible for:
- Carryback to a prior tax year (when allowed by law), or
- Carryforward to future tax years
These carryover rules can help you benefit from the credit even if you can't use the full amount in the current year.
Where Do I Enter the General Business Credit in the Program?
To access the General Business Credit section in the software:
- Select Federal.
- Select Deductions (Select my forms)
- Select Credits
- Open Less Common Credits
- Select General Business Credit
The program will guide you through entering the information needed to determine whether you qualify for any available business credits and calculate the amount that can be claimed on your return.