Tax Credits to Pass Along to Your Small Business Clients
Staying current on information regarding business tax credits for your clients can result in deeper relationships as they will see you as their trusted advisor who has their best interests in mind.
Let's consider how this would work for the client who mentions they just purchased an electric car. To claim a general business credit for this client you will first have to get the Form (Form 8834, the Qualified Electric Vehicle Credit) and you may also have to file Form 3800.
Finally, given all of the changes with the health care system in the last year, you should be prepared to discuss anything having to do with health care, especially tax credits associated with health care.
Listed below you will find information about tax credits accompanied by the link to each Form you use to figure each credit. For more information from the IRS, visit their Business Tax Credits page.
- File Form 3800 to claim any of the general business credits. Generally you are not required to complete the source credit Form or attach it to Form 3800 if you are a taxpayer that is not in a partnership or S corporation, and your only source for a credit listed in Form 3800, Part III, is from a partnership, S corporation, estate, trust, or cooperative. Exceptions do apply.
- File Form 3468 to claim the investment credit consisting of the rehabilitation, energy, qualifying advanced coal project, qualifying gasification project, and qualifying advanced energy project credits.
- File Form 5735 must be completed by a domestic corporation (other than an S corporation) for each year the American Samoa economic development credit election is in effect.
- Employers file this form to claim the work opportunity credit for qualified first- or second-year wages they paid to or incurred for targeted group employees during the tax year.
- File Form 6478 to figure your alcohol and cellulosic biofuel fuels credit. You claim the credit for the tax year in which the sale or use occurs. This credit consists of the:
- Alcohol mixture credit,
- Alcohol credit,
- Small ethanol producer credit, and
- Cellulosic biofuel producer credit.
- File Form 6765 to figure and claim the credit for increasing research activities or to elect the reduced credit under section 280C.
- Form 8586 is used by pass-through entities—such as partnerships, S corporations, estates, and trusts—that cannot originate a claim for the low-income housing credit elsewhere. Pass-through entities are business structures created to reduce or avoid the effects of double taxation. This Form summarizes credits for qualifying buildings that provide low-income housing. Individual taxpayers are not required to complete Form 8586.
- File Form 8611 if you must recapture part of the low-income housing credit you claimed in previous years because the qualified basis decreased from one year to the next or you disposed of a building, or your interest therein, and you did not follow the procedures that would have prevented recapture of the credit.
- File Form 8820 to claim the orphan drug credit. The credit is 50% of qualified clinical testing expenses paid or incurred during the tax year.
- Eligible small businesses use this form to claim the disabled access credit. This credit is part of the general business credit.
- File Form 8834 to claim the qualified plug-in electric vehicle credit and any qualified electric vehicle passive activity credits allowed for the current tax year.
- File Form 8835 to claim renewable electricity, refined coal, and Indian coal production credit. The credit is allowed only for the sale of electricity, refined coal, or Indian coal produced in the United States or U.S. possessions from qualified energy resources at a qualified facility.
- File Form 8844 to claim the empowerment zone employment credit.
- Employers of American Indians who are qualified employees use this form to claim the Indian employment credit.
- Certain food and beverage establishments use this form to claim a credit for social security and Medicare taxes paid or incurred by the employer on certain employees' tips. The credit is part of the general business credit.
- File Form 8864 to figure your biodiesel and renewable diesel fuels credit. Claim the credit for the tax year in which the sale or use occurs. This credit consists of the:
- Biodiesel credit,
- Renewable diesel credit,
- Biodiesel mixture credit,
- Renewable diesel mixture credit, and
- Small agri-biodiesel producer credit.
- File Form 8874 to claim the new markets credit for qualified equity investments made in qualified community development entities (CDEs). This credit is part of the general business credit.
- Eligible small employers use this form to claim the credit for qualified startup costs incurred in establishing or administering an eligible employer plan.
- Employers use this form to claim the credit for qualified childcare facility and resource and referral expenditures.
- Qualified small business refiners use this form to claim the low sulfur diesel fuel production credit.
- Eligible taxpayers file this form to claim the railroad track maintenance credit (RTMC) for qualified railroad track maintenance expenditures (QRTME) paid or incurred during the tax year. If you are an assignor with respect to miles of eligible railroad track, you must file Form 8900 even if you do not claim any RTMC.
- File Form 8906 to claim the distilled spirits credit. The credit is part of the general business credit.
- File Form 8907 to figure the nonconventional source fuel credit. The credit is part of the general business credit. This credit is allowed for qualified coke or coke gas you produced and sold to an unrelated person during the tax year.
- Eligible contractors use this form to claim a credit for each qualified energy efficient home sold or leased to another person during the tax year for use as a residence.
- File Form 8910 to figure your credit for alternative motor vehicles you placed in service during your tax year. The credit attributable to depreciable property (vehicles used for business or investment purposes) is treated as a general business credit. Any credit not attributable to depreciable property is treated as a personal credit.
- File form 8911 to figure your credit for alternative fuel vehicle refueling property you placed in service during your tax year. The credit attributable to depreciable property (refueling property used for business or investment purposes) is treated as a general business credit. Any credit not attributable to depreciable property is treated as a personal credit.
- Taxpayers who employ individuals as miners in U.S. underground mines use Form 8923 to claim the mine rescue team training credit.