Small Business Accounting:

The General Business Credit

Some tax credits are listed under the general business credit, which is figured out using the credit from this year plus the carry forward from previous years. You need to file form 3800 for general business credit if your client has more than one credit to report and you have carry forward or carry back from previous years. In addition, all the credits must have been incurred from passive activity (form 8582-CR). The empowerment zone employment credit shouldn’t be counted here for any of the credits and should be reported using a separate form 8844.

Following is a list of general business credits:

  • Alcohol used as fuel credit (Form 6478).
  • Contributions to selected community development corporations credit (Form 8847).
  • Disabled access credit (Form 8826).
  • Employer social security and Medicare taxes paid on certain employee tips credit (Form 8846).
  • Enhanced oil recovery credit (Form 8830).
  • Indian employment credit (Form 8845).
  • Investment credit (Form 3468).
  • Low-income housing credit (Form 8586).
  • Orphan drug credit (Form 8820).
  • Renewable electricity production credit (Form 8835).
  • Research credit (Form 6765).
  • Welfare-to-work credit (Form 8861).
  • Work opportunity credit (Form 5884).

So basically when you sit down to identify your client’s tax credits, see if they have more than one of the credits listed above. If that is the case then file form 3800. For example, if your client has work opportunity credit and disabled access credit, then they need to file form 3800. But if your client has the work opportunity credit and empowerment zone employment credit, you don’t need to file form 3800. You will have to file separate forms.