The IRS offers tax credits designed to reward the very things small businesses are already doing to grow. The tricky part is figuring out which ones apply to you.

A tax credit is different from a deduction. Deductions lower your taxable income, while credits reduce your tax bill dollar-for-dollar. That means they can have a bigger impact on what you owe—or even lead to a refund. 

Step 1: Know Your Business Structure

• Sole proprietor/Schedule C: If you’re a freelancer, consultant, or gig worker, you’ll focus on credits that don’t require employees (think Research & Development (R&D) Credit or Energy Efficiency Credits).
• LLC or S-Corp with employees: Employer-focused credits like the Work Opportunity Tax Credit (WOTC) or Small Business Health Care Tax Credit may apply.

Step 2: Look at Your Workforce

• Will you hire veterans, long-term unemployed, or SNAP recipients? You may qualify for the Work Opportunity Tax Credit (WOTC), worth up to $9,600 per employee.
• Do you offer paid family or medical leave? Check out the Employer Credit for Paid Family & Medical Leave.
• Do you provide on-site childcare or childcare benefits? The Childcare Credit could save you up to $150,000 per year.

Step 3: Check Your Benefits & Perks

• Is health insurance provided by your company? The Small Business Health Care Tax Credit covers up to 50% of employer-paid premiums.
• Did you make your office ADA-compliant? The Disabled Access Credit offers up to $5,000 per year for accessibility improvements.

Step 4: Review Your Projects & Investments

• Have you developed new products, improved processes, or wrote software? Don’t overlook the R&D Credit.
• Are you focusing on being energy efficient? Installed solar panels, EV chargers, or energy-efficient HVAC systems may qualify your business for Energy Efficiency & Renewable Energy Credits.

Step 5: Factor in Size & Revenue

• How many employees do you have? If you have fewer than 25 employees with modest average wages, you’re a strong candidate for the Health Care Tax Credit.
• What is your annual revenue? If it is under $1 million, you might be eligible for the Disabled Access Credit.

Here’s a quick way to think about it:

• Solo business owner with no staff – Look into R&D and Energy credits.
• Small team, lower wages, offering benefits – Health Care and Childcare credits.
• Hiring from targeted groups – WOTC (view the list of targeted groups).
• Making your business greener or more accessible – Energy + Disabled Access credits.

Pro Tip: Use IRS Form 3800 as a Checklist Form 3800 (General Business Credit) consolidates many of the smaller credit forms. Even if you don’t file it yourself, reviewing the instructions can help you see what’s out there.

Are you ready to get these tax credits?

Tax credits aren’t just for Fortune 500 companies—they’re designed for small businesses, too. The key is matching what you already do (hiring, offering benefits, innovating, or going green) with the right credit. And if you’re unsure? A CPA or tax credit expert can help uncover opportunities you might otherwise miss.

TCG offers CPA’s, accounting firms and other businesses tax credit analysis reporting. The comprehensive tax credit analysis is a detailed review of the state and federal employer-related tax credits available to your company.