If your business can make improvements that benefit the company or its employees, wouldn't it be even better if you could also get help from the government to do so? If your answer is 'yes', then you should know about the General Business Credit (GBC). What is this useful tax credit? And how can you use it to make positive changes for yourself and others? Here's a short guide.
What is the General Business Credit?
The GBC is a collection of various business tax credits each available to businesses who take an action that furthers some policy objective in the tax code. The credits are generally offered to promote some action deemed to aid the public good. Because these individual tax credits are for very specific situations, they have been grouped together under the GBC for convenience.
What Credits Are Included?
The General Business Credit's inclusions can vary based on what public policy matters are being promoted. It incorporates credits to encourage employers to hire workers in certain situations, to help pay for the cost of providing access or insurance, and for energy-efficiency improvements or the creation of targeted energy facilities.
Specifically, these tax credits include:
- Small Business Health Care Tax Credit
- HIRE Act Tax Credit
- Research and Development Tax Credit
- Alternative Motor Vehicle Credit
- Biodiesel and Renewable Diesel Fuels Credit
- Credit for FICA Taxes on Tips
- Credit for Employer-Provided Child Care Facilities
- Credit for Small Employer Pension Plan Startup
- Renewable Energy and Alternative Fuels Credits
- Disabled Access Credit
- New Markets Credit
Clearly, the list is highly varied and many businesses will only qualify for one or two credits per year. But your company could conceivably claim many credits for significant savings on its taxes.
How Can You Gain Double Benefits?
The added benefit of many of these credits is that taking these actions benefits your company. Some actions, like paying FICA taxes on tips, may be mandatory. Others, like research activities, help your business grow. And others, such as credits for employee insurance or pensions, appeal to employees.
Consider the Disabled Access Credit. Businesses are required to provide access for disabled persons. When you do so, you also expand the pool of qualified and experienced employees your company can attract. And customers and business partners have a positive view of the business. Additionally, the GBC means you can recoup some of your costs and lower your taxes while doing so — a win for everyone.
Where Should You Start?
To claim these valuable credits, you must first understand their rules and limitations. Then, you'll need assistance claiming them through various IRS and state income tax forms. Do this by consulting with an experienced tax services provider in your state. The sooner you learn more, the sooner you can save money and improve your business.
Tax services can help you determine if your business is eligible for GBC, so contact a local tax professional.