Get 1995 Instructions For Form 3800. General Business Credit

Allowable Credit. Line 13 is revised to reflect the change to section 38(c)(6)(E), which provides that, for corporations, the limit for general business credits is 75% of net income tax (instead of regular income tax).

The general business credit is the total value of all tax credits a business claims for a tax year. If you claim more than one business credit, you must report the total on form Form 3800, General Business Credit, when filing your income tax return.

Business tax credits are an amount of money that companies can subtract from the taxes owed to a government. Business tax credits are applied against the taxes owed, as opposed to a deduction that is used to reduce taxable income. Businesses apply the tax credits when they file their annual tax return.

The passive activity credit is the amount by which the sum of all your credits subject to the passive activity rules exceed your regular tax liability allocable to all passive activities for the tax year. Credits that are included in figuring the general business credit are subject to the passive activity rules.

File Form 3800 to claim any of the general business credits. Note: To claim credits carried over from a prior year, taxpayers must provide details.

If you can't use part or all of your general business credit because of the tax liability limit (Part II, line 38, is less than the sum of Part I, line 6, and Part II, lines 25 and 36), carry the unused credit back 1 year. If the credit is for oil and gas production from marginal wells, the carryback period is 5 years.

Dozens of 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.

Your general business credit for the year consists of your carryforward of business credits from prior years plus the total of your current year business credits. In addition, your general business credit for the current year may be increased later by the carryback of business credits from later years.