The Big List of U.S. Small Business Tax Credits

Sep 28, 2023 By Triston Martin

Understanding how these tax credits can significantly impact your bottom line is crucial. We aim to provide a comprehensive list of U.S. small business tax credits, offering practical insights and knowledge. Exploring these credits will uncover opportunities to reduce tax liabilities and enhance your business's financial well-being.

This article will explore the world of small business tax credits, a vital financial management component for entrepreneurs and business owners.

Do Your Research and Planning First

Before we hop on to different small business tax credits, you must learn the essential steps of researching and planning, which form the foundation for effectively harnessing small business tax credits. Small business owners should understand that grasping the intricacies of these tax credits is merely the starting point. Success in this realm depends on thorough research and careful planning.

Through your diligent research, you can pinpoint the tax credits applicable to your business and match your eligibility criteria. This initial legwork lays the groundwork for the planning phase, where you can strategically incorporate these credits into your financial strategy.

Identify Your Business Needs - Begin by assessing your small business's financial situation and needs. Understand which areas could benefit from tax credits, such as hiring, research, or energy efficiency improvements.

Research Tax Credit Options - Conduct thorough research on the various federal, state, and local tax credits available for small businesses. Government websites, tax guides, and professional advice can be valuable sources of information.

Consult a Tax Professional - Consider seeking advice from a tax professional or accountant specializing in small business tax planning. They can provide personalized guidance based on your unique circumstances.

The List of Small Business Tax Credit

Here is the list of business tax credit

Research and Development Tax Credit

The Research and Development (R&D) Tax Credit serves as a vital incentive for small businesses in the United States, nurturing innovation and technological progress. This federal tax credit rewards companies that invest in research and development endeavors.

The R&D Tax Credit is designed for businesses involved in qualified research activities. These activities encompass a broad spectrum, including the creation of new products, processes, or improvements to existing ones. By encouraging such initiatives, this credit propels not only business growth but also national advancement in science and technology.

Rehabilitation and Energy Investments Tax Credit

This tax credit encourages small businesses to invest in promoting conservation, energy efficiency, and revitalization of historic structures.

Rehabilitation Tax Credit – Rehabilitation tax credits aim to breathe new life into historic structures. Small businesses can earn these credits by renovating and preserving historic buildings. The credits typically cover a portion of the expenses associated with restoring and rehabilitating these structures.

Energy Investment Tax Credit – This tax credit is focused on impelling investments in renewable energy sources such as solar, wind, and geothermal systems. Small businesses that install and operate qualifying renewable energy systems can benefit from this credit.

Small Business Health Care Tax Credit

This is a valuable incentive for small business owners in the U.S. It is designed to help ease the financial burden of providing health insurance to employees, making it more feasible for small businesses to offer this essential benefit.

Alternative Fuel Credits

Alternative fuel credits are federal tax incentives for businesses that invest in and use alternative fuels to reduce their reliance on traditional fossil fuels. These credits encourage the adoption of cleaner and more environmentally friendly energy sources for various purposes, including transportation and energy production.

Work Opportunity Tax Credit (WOTC)

This federal program encourages companies to recruit people from specified target categories that face job difficulties, such as veterans, ex-offenders, and those receiving government assistance. This tax credit offers financial rewards to organizations hiring and retaining workers from these target categories, making it a win-win situation for companies and job seekers.

Disabled Access Credit

Businesses that spend costs developing accommodations for people with disabilities, such as adding ramps, enlarging doors, or creating accessible restrooms, are given financial assistance. With the help of this tax credit, inclusion will be encouraged, and persons with disabilities will have easier access to goods and services.

New Markets Credit

It promotes financial support for companies and construction leads in low-income communities. Participating in this program entitles investors to tax credits, making investing money in underserved areas desirable. This new market credit is essential in reviving underserved regions, encouraging job creation, and stimulating economic growth where needed.

Credit for Employer Social Security

It allows eligible employers to claim a credit against their federal income tax liability. This credit helps offset the costs of paying the employer's portion of “Social Security and Medicare taxes” for certain employees. Reducing the tax burden on the workers encourages businesses to hire and retain employees.

Family and Medical Leave Credit

This tax credit allows qualifying companies to claim a tax credit for a part of the earnings paid to employees on approved family or medical leave. This credit is intended to promote work-life balance, employee well-being, and retention.

Providing financial assistance to employers encourages them to give this critical benefit, thereby building a healthier and more friendly work environment. The credit benefits employers and employees by encouraging flexibility and humane employment practices.


In this guide, we have covered the list of a few business tax credits and their role in a community to build a better future and make life easy for other people. You can go through the article to learn about these business tax credits

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