Business Tax Credits Available to Small Business - information from Brookwood Tax Service

This page last updated on
December 12, 2007

Business Tax Credits Can Save Money
Credits Save More Tax Than Deductions of the Same Amount

Are you missing out on any valuable tax credits? Tax credits reduce your tax liability dollar for dollar. Plus, you can carry any excess dollars forward to future years. Some of the credits you may be entitled to include:

Employer Social Security Credit. Food and beverage establishments are allowed a business credit for an amount equal to the social security tax paid on any tips received by employees that bring their earnings above the minimum wage amount.

Disabled Access Credit. If you incurred expenses to provide handicap access to your business establishment, you are allowed a credit of 50% of the expenses you incur of at least $250 and not more than $10,250. This means you may be allowed a credit of as much as $5,000.

Investment Credit. This credit has two separate parts. The business energy credit is for property you place in service during the year, including solar, geothermal, microturbine, and qualified fuel cell property. The rehabilitation credit is allowed for expenses you incur to rehabilitate certain buildings. Taxpayer-owners and lessees may qualify for the rehabilitation credit.

Work Opportunity Credit. The work opportunity credit provides you an incentive for hiring individuals from targeted groups that have a particularly high unemployment rate or other special employment needs. Such individuals may include qualified veterans, taxpayers who are receiving certain public assistance, and qualified ex-felons. The work opportunity credit expires for any amount paid to an employee who begins work for the employer after December 31, 2007.

Research Credit. This credit is designed to encourage businesses to increase the amount they spend on research and experimental activities. This credit is not available for otherwise qualified research expenses paid or incurred after December 31, 2007.

Alcohol Fuels Credit. This credit applies to alcohol you sold or used as a fuel. Alcohol for this purpose includes ethanol and methanol. It does not include alcohol produced from petroleum, natural gas, coal, or peat; nor does it include alcohol of less than 150 proof.

This is not an all-inclusive list of the available credits. Credits are also available for low-income housing, renewable electricity production, and for wages paid to Native Americans who work within a reservation.

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Business Tax Credits Can Save Money Credits Save More Tax Than Deductions of the Same Amount

Business Tax Credits Can Save Money
Credits Save More Tax Than Deductions of the Same Amount