# What Is Form 3800: General Business Credit?

## What Is the General Business Credit?

The general business credit (GBC) is the aggregate value of individual tax credits a business claims during a tax year. It consists of [carryforward](https://www.investopedia.com/terms/t/tax-loss-carryforward.asp) credits from previous years plus the current year's total business credits. Because it's a tax credit, not a [tax deduction](https://www.investopedia.com/terms/t/tax-deduction.asp)—the amount comes directly off the tax bill.

To claim multiple business tax credits on your tax return, filers must attach [Form 3800](https://www.irs.gov/pub/irs-pdf/f3800.pdf), General Business Credit, and the IRS forms for the individual credits.

### Key Takeaways

*   The general business credit is the total value of all tax credits a business claims for a tax year.
*   To claim more than one business credit, filers must report the total on Form 3800.
*   Many business tax credits may be included in Form 3800, including the investment credit, low-income housing credit, and the credit for small employer health insurance premiums.

## Types of Tax Credits

The general business tax credit is not a single, separate credit. It is a collection of [tax credits](https://www.investopedia.com/terms/t/taxcredit.asp) that promote various business activities, including research, oil recovery, reforestation, and starting a [pension plan](https://www.investopedia.com/terms/p/pensionplan.asp).

Filers claim the individual tax credits on their relevant [tax forms](https://www.investopedia.com/federal-tax-forms-4782425) and carry over the resulting combined credit to the General Business Credit [Form 3800](https://www.irs.gov/pub/irs-pdf/f3800.pdf) to determine the overall allowable credit. As of 2024, some common credits businesses claim include:

*   [Work opportunity](https://www.investopedia.com/work-opportunity-tax-credit-definition-5080842) credit ([Form 5884](https://www.irs.gov/forms-pubs/about-form-5884))
*   Credit for [small employer health insurance](https://www.investopedia.com/the-small-business-healthcare-tax-credit-5070476) premiums ([Form 8941](https://www.irs.gov/forms-pubs/about-form-8941))
*   Employer credit for paid family and medical leave ([Form 8994](https://www.irs.gov/forms-pubs/about-form-8994))
*   Low-income housing tax credit ([Form 8586](https://www.irs.gov/forms-pubs/about-form-8586))
*   Disabled access credit ([Form 8826](https://www.irs.gov/forms-pubs/about-form-8826))
*   Credit for employer-provided child care facilities and services ([Form 8882](https://www.irs.gov/forms-pubs/about-form-8882))
*   Credit for small employer pension plan startup costs ([Form 8881](https://www.irs.gov/forms-pubs/about-form-8881))
*   Credit for employer Social Security and Medicare taxes paid on certain employee tips ([Form 8846](https://www.irs.gov/forms-pubs/about-form-8846))

> **Tip**
>
> To claim multiple business tax credits, taxpayers fill out the appropriate IRS form for each tax credit and then carry the total to Form 3800, General Business Credit.

## Accounting Rules

The general business tax credit is a [nonrefundable credit](https://www.investopedia.com/terms/n/nonrefundabletaxcredit.asp) that directly reduces a tax bill. However, as a nonrefundable credit, it reduces the tax liability to zero. Any credit amount that remains beyond that is forfeited.

If part or all of the general business credit cannot be used due to the tax liability limit, taxpayers can generally carry the unused credit back one year. Different rules apply for some credits, including oil and gas production credits. General business credits are treated as [first-in, first-out (FIFO)](https://www.investopedia.com/terms/f/fifo.asp). Therefore, the order businesses use credits in any tax year is:

*   Carryforwards to that year, the earliest ones first;
*   The general business credit earned in that year; and
*   The carryback to that year.

> **Warning**
>
> Some tax credits have expiration dates. Be sure to check the instructions for each credit to make sure it's available for the applicable tax year.

## Are There Income Limitations for General Business Credits?

The general business credit has limits. Taxpayers should add their net income tax and [alternative minimum tax](https://www.investopedia.com/terms/a/alternativeminimumtax.asp). From that sum, subtract the greater of the tentative minimum tax for the tax year or 25% of the amount of their regular [tax liability](https://www.investopedia.com/terms/t/taxliability.asp) that exceeds $25,000 ($12,500 for married taxpayers filing separately, but only if both of them qualify for the credit) If one spouse has no current or unused credit, the other spouse may use the entire $25,000 in determining their credit for the tax year.

## Which Tax Credits Are Included in the General Business Credit?

A [complete list](https://www.irs.gov/instructions/i3800) is available on the IRS website which includes investment credit, work opportunity credit, low-income housing credit, empowerment zone employment credit, credit for small employer pension plan startup costs, credit for employer-provided childcare facilities and services, energy-efficient home credit, alternative motor vehicle credit, credit for small employer health insurance premiums, and the employer credit for paid family and medical leave.

## Which Businesses Are Eligible for the General Business Credit?

According to the IRS, an eligible small business can be a non-publicly traded corporation, partnership, or sole proprietorship. The entity's average annual gross receipts during the prior three tax years can't exceed $50 million. If the business is less than three years old, base the average yearly gross receipts on the period the entity has existed.

## The Bottom Line

Form 3800 is used to compile all tax credit information for eligible businesses. General business credit consists of carryforward business credits from prior years plus current-year business credits.  

> **Article Sources**
>
> 1.  Internal Revenue Service. "[Business Tax Credits](https://www.irs.gov/businesses/small-businesses-self-employed/business-tax-credits)."
>     
> 2.  Internal Revenue Service. "[Instructions for Form 3800 (2023)](https://www.irs.gov/instructions/i3800)."
>     
> 3.  Internal Revenue Service. "[Publication 334 (2021), Tax Guide for Small Business](https://www.irs.gov/publications/p334)."