Federal & State Tax Credits
Reduce your tax burden with business and individual tax credits. From R&D to energy to hiring incentives, discover credits that can save you thousands.
Business Tax Credits
Research & Development (R&D) Tax Credit
Reward for businesses investing in innovation and product development. Can be used to offset payroll taxes for startups.
Up to 20% of qualified expenses
Businesses of all sizes conducting qualified research
Key Points:
- Covers wages, supplies, and contractor costs
- Startups can claim against payroll tax
- State R&D credits available in 38+ states
Work Opportunity Tax Credit (WOTC)
Incentive for hiring from targeted groups including veterans, ex-felons, and long-term unemployed.
$2,400 - $9,600 per eligible hire
Employers hiring from 10 targeted groups
Key Points:
- Veterans can qualify for up to $9,600
- Long-term SNAP recipients: up to $2,400
- Must certify within 28 days of hire
Disabled Access Credit
Small business credit for making facilities accessible to people with disabilities.
50% of eligible expenses (up to $5,000 credit)
Businesses with ≤30 employees or ≤$1M revenue
Key Points:
- Covers ramps, signage, equipment
- Can combine with ADA deduction
- Easy to claim on Form 8826
Energy Investment Tax Credit (ITC)
Credit for businesses investing in renewable energy systems (solar, wind, geothermal).
30% of project costs (solar), varies by technology
Businesses installing qualifying energy systems
Key Points:
- Solar: 30% through 2032
- Bonus credits for domestic content
- Can combine with accelerated depreciation
Empowerment Zone Employment Credit
Credit for businesses hiring employees who live and work in designated Empowerment Zones.
Up to $3,000 per eligible employee
Businesses in or hiring from Empowerment Zones
Key Points:
- 20% of first $15,000 in wages
- Must work and live in zone
- Limited zones remaining
Employer-Provided Child Care Credit
Credit for businesses providing child care facilities or resources to employees.
25% of expenses + 10% of resource/referral costs
Businesses providing qualified child care
Key Points:
- Up to $150,000 per year
- Covers facility construction and operation
- Also covers contracted child care
Individual Tax Credits
Earned Income Tax Credit (EITC)
Refundable credit for low to moderate-income workers and families.
Up to $7,430 (3+ children)
Income limits based on filing status and children
Child Tax Credit
Credit for each qualifying child under 17.
Up to $2,000 per child
Income limits apply
Child and Dependent Care Credit
Credit for expenses paid for care while you work or look for work.
20-35% of up to $3,000 (1 child) or $6,000 (2+)
Working parents with children under 13
Residential Clean Energy Credit
Credit for installing solar, wind, geothermal, or battery storage at home.
30% of costs (through 2032)
Homeowners installing qualifying systems
Electric Vehicle Tax Credit
Credit for purchasing new electric or plug-in hybrid vehicles.
Up to $7,500 (new) or $4,000 (used)
Income limits and vehicle requirements
Saver's Credit
Credit for low to moderate-income individuals contributing to retirement accounts.
Up to $1,000 (individual) or $2,000 (joint)
Income limits based on filing status
State-Specific Tax Credits
In addition to federal credits, most states offer their own tax incentives for businesses and residents. These vary widely by state and can often be stacked with federal credits.
California
- CA Competes Tax Credit (job creation)
- California R&D Credit
- Film & TV Tax Credit
- New Employment Credit
New York
- Excelsior Jobs Program
- Investment Tax Credit
- Brownfield Cleanup Credit
- Film Production Credit
Texas
- Texas Enterprise Zone Program
- Research & Development Credit
- Franchise Tax Credit Programs
- Historic Preservation Credit
Massachusetts
- Economic Development Incentive Program
- Research Credit
- Film Tax Credit
- Certified Housing Development Credit
Contact your state's Department of Revenue or Economic Development for details on available credits.
How to Claim Tax Credits
Determine Eligibility
Review IRS or state guidelines to ensure your activity, investment, or situation qualifies.
Track Qualifying Expenses
Maintain detailed records of expenses, wages, or investments related to the credit.
Complete Required Forms
Fill out IRS forms (e.g., Form 3800 for business credits, Schedule 3 for individual credits).
File with Tax Return
Claim credits on your annual tax return. Some credits require pre-certification.
Carry Forward if Needed
Many credits can be carried forward to future years if they exceed current tax liability.
⚠️ Important Reminders
- • Consult a tax professional: Tax law is complex. A CPA can maximize your credits.
- • Keep detailed records: The IRS may audit credit claims. Document everything.
- • Don't miss deadlines: Some credits require pre-certification or timely filing.
- • Check annual changes: Credit amounts and eligibility change yearly.
Maximize Your Tax Savings
GrantNavigation tracks tax credit programs alongside grants and loans. Find opportunities to reduce your tax liability.