Federal Tax Credits
The General Business Credit is a provision that encompasses a collection of various tax credits available to businesses. Each of these credits is calculated separately, and if a business qualifies for more than one of these credits, they are aggregated under the General Business Credit umbrella on Form 3800.
Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a federal tax credit program that provides financial incentives to employers who hire individuals from certain targeted groups who may face significant barriers to employment. Some of the targeted groups include veterans, ex-felons, individuals receiving government assistance, and certain youth groups. Georgia is one of the states that participates in the WOTC program. To qualify for the WOTC program, the employee must be certified as a member of one of the targeted groups by the Georgia Department of Labor. Employers must submit an application to the department within 28 days of the employee's start date and receive certification before claiming the tax credit.
For further information regarding the WOTC program, like tax credit amounts and FAQ's, you can visit the IRS website.
Credit for Increasing Research Activities
Also known as the Federal Research Credit, and formerly the Research & Development (R&D) Federal Tax Credit, this credit is a tax incentive program offered by the United States federal government to encourage businesses to invest in research and development activities. The credit allows businesses to offset a portion of their federal income tax liability based on their qualified R&D expenditures.
To qualify for the R&D tax credit, a business must conduct research and development activities that meet certain criteria. The activity must be intended to develop new or improved products, processes, or software. It must also involve the resolution of technical uncertainties, which means that the research must involve experimentation to address unknowns or uncertainties in the development process.
To calculate the R&D tax credit, the business must complete IRS Form 6765, Credit for Increasing Research Activities, and attach it to its federal income tax return. The form requires the business to provide detailed information about its research activities and the associated expenses. It's important to note that the calculation of the R&D tax credit can be complex, and businesses may want to seek the advice of a tax professional to ensure that they are accurately calculating and claiming the credit.
Additional Tax Credits
|Advanced Manufacturing Investment Credit (added by the CHIPS Act)|
|Federal Rehabilitation Investment Credit|
|Low-Income Communities Bonus Credit (added by the Inflation Reduction Act)|
|Qualified Commercial Clean Vehicle Credit (added by the Inflation Reduction Act)|
|Alternative Fuel Vehicle Refueling Property Credit (added by the Inflation Reduction Act)|
|Sustainable Aviation Fuel Credit (added by the Inflation Reduction Act, available until 31 December 2024)|
|New Energy Efficient Homes Credit (retroactively extended, previously expired 31 December 2021)|
|Advanced Energy Project Credit (added by the IRA)|
|Disabled Access Credit (eligible for certain small businesses)|
|Indian Employment Credit|
|Retirement Plans Startup Costs Tax Credit|
|Employer-provided child care credit|
|Distilled Spirits Credit|
|Alternative Motor Vehicle Credit|
|Employer Differential Wage Payments Credit|
|Qualified Plug-In Electric Drive Vehicle Credit|