Small-business owners often only think about tax credits when it’s time to file their annual tax returns. But to save the most on your tax bill, you should take measured steps throughout the year.
Read through the best small business tax credits for 2026 to understand which credits you can claim on your 2025 and 2026 returns. But use our tax credits at a glance table and action plan to set yourself up for maximum savings on your 2026 return.
Note: This page covers only federal tax credits. State tax credits and requirements to claim them vary.
What's the difference between tax credits vs. tax deductions?
People often confuse tax credits with tax deductions, but they are not the same thing.
Tax deductions decrease your taxable income, which can put you in a lower tax bracket if you report business income on your personal tax return.
Tax credits reduce your tax bill on a dollar-for-dollar basis.
The following table gives you a dollar-for-dollar comparison of your savings from a $10,000 tax deduction vs. a $10,000 tax credit. Notice in this example that the deduction drops your taxable income to $90,000, but the tax credit results in a lower tax bill.
| $10,000 tax deduction | $10,000 tax credit | |
| Pre-tax-break income | $100,000 | $100,000 |
| Tax deduction | –$10,000 | |
| Taxable income | $90,000 | $100,000 |
| Tax rate* | 25% | 25% |
| Calculated tax | $22,500 | $25,000 |
| Tax credit | –$10,000 | |
| Your tax bill | $22,500 | $15,000 |
| *Example rate. The U.S. has a progressive tax system. | ||
» Learn more about business tax deductions.
Take action before December 31
Here are several steps you can take between June and December 2026 to generate business tax credits for your 2026 tax return:
- Start a new retirement plan. The retirement plans startup costs tax credit covers up to 100% of eligible setup costs for businesses with 50 or fewer employees. (You can claim up to $5,000 per year for three years.) You must establish the plan before year-end to be eligible.
- Add automatic enrollment to an existing plan. Earn a separate $500/year credit for up to three years as part of the retirement plans startup costs tax credit.
- Document R&D activities as they happen. Qualifying work done right now counts toward the 2026 credit. Documentation is the hardest part to reconstruct later, so keep the records as you go.
- Make accessibility improvements to your facility. The Disabled Access Credit resets every year, so you can continue to claim credits each year you make improvements. Work must be completed by Dec. 31.
- Install commercial solar. Solar facilities must begin construction by July 4, 2026 to count toward the credit.
- Put your paid leave policy in writing. A written policy covering two or more weeks at 50% or more wage replacement is required before you can claim the paid family and medical leave credit.
- Screen new hires for WOTC eligibility. The Work Opportunity Tax Credit is authorized only until Dec. 31, 2025, which means this credit has lapsed. However, it has been retroactively reinstated in the past. Keeping accurate records now costs nothing and protects your claim if Congress reinstates this one.
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How to claim small-business tax credits
If you’re eligible for one or more small-business tax credits, then you must submit IRS Form 3800 along with your tax return. This form lists each small-business tax credit that your company may be eligible for.
As you might expect, there’s a limit on the amount of small-business tax credits you can claim each year. This formula will help you determine your business’s limit:
- Add your net income tax and alternative minimum tax.
- From that sum, subtract the greater of either your tentative minimum tax for the tax year or 25% of the amount of your regular tax liability that’s greater than $25,000.
Each individual tax credit requires its own form, noted below. On Form 3800, you’ll add up each of the individual tax credits to calculate the total value of your General Business Credits.
If you claim a small-business tax credit but can’t maximize it this tax year because you’ve reached your limit, you may be eligible to carry the unused portion of the credit forward to a future tax year. Just remember that whenever you do claim a tax credit, you typically can’t claim a deduction for the same expense.
Return deadlines by entity type
You’ll claim your tax credit with your annual tax return. Return due dates vary by entity type.
- Partnerships and S corporations: March 15 (March 16 in 2026); September 15 on extension.
- Sole proprietors, single-member LLCs and C corporations: April 15; October 15 on extension.
» See NerdWallet’s complete list of business tax deadlines.
10 Small-business tax credits for 2026
Here are the small-business tax credits not to miss when filing your 2025 tax return (still relevant for any business owner who filed an extension) and planning ahead for your 2026 return.
‼️ Clean Electricity Investment Credit
🤓 Nerdy take: Act now on installing qualifying clean energy facilities or technology if you hope to take advantage of this credit. And why wouldn’t you? Considering that commercial electricity costs rose nearly 27% between 2020 and 2025, solar energy is increasingly enticing. (Just be forewarned: The form for this credit is a doozy at 12 pages.)
Who qualifies: Businesses that install qualifying clean energy equipment or technology.
What it’s worth: 6% to 30% of qualified clean energy costs.
When to act: For wind and solar facilities, begin construction by July 4, 2026, or ensure the facility is placed in service by Dec. 31, 2027. Other zero-emission technologies are not subject to this accelerated phaseout.
How to claim: Complete and attach Form 3468 to your business tax return.
Credit for Increasing Research Activities (R&D tax credit)
🤓 Nerdy take: There are firms that specialize in helping you claim the R&D tax credit. This one is complex and tricky to determine if you're eligible. But the firm can come in, do an analysis and prepare the credit form for you. The firm will take a percentage of your benefit. But for some businesses, the payoff can be big enough to make it worth it.
Who qualifies: Businesses conducting and incurring expenses for qualified research activities. The business must meet gross receipts thresholds that vary depending on how the credit is claimed, including against payroll taxes for qualifying small businesses. Recent legislation has updated some of these limits, so check with a tax professional or the IRS for current figures. The research activities must be performed in the U.S., and you need to be able to show proper documentation of the activities. Eligible R&D activities must meet the requirements of a four-part test:
- The business has incurred the expenses and they are in relation to experimentation or lab testing.
- The research you’re performing is technological and meant to create a new or improve an existing component of your business.
- The research activities must involve experimentation related to a new or improved function of the business.
- The research is directly related to a new or improved aspect of the business.
What it’s worth: 14% or 20% of your business’s qualified research expenses, depending on which calculation method you go with (alternative simplified credit or regular credit, respectively). In reality, however, because of how the calculations are done, the final percentage credited ends up being lower.
When to act: Year-round. Document qualifying activities and expenses as they happen.
How to claim: Complete and attach Form 6765 to your business tax return. Additionally, complete Form 8974 if you’re claiming the payroll tax offset.
FICA Tip Credit
🤓 Nerdy take: The One Big Beautiful Bill Act (OBBBA) of 2025 expanded this credit to include personal care businesses in addition to food and beverage establishments. With no credit cap, this one can yield considerable tax savings, especially if you already pay your employees an hourly wage above $5.15 (food and beverage) or $7.25 (personal care).
Who qualifies: Food and beverage as well as personal care business owners with employees who typically collect tips. You must have paid FICA taxes on your employees’ tip income.
What it’s worth: 7.65% of "creditable tips." Those are the tips on which you paid employer FICA taxes above the amount needed to bring employee wages to $5.15 per hour for food and beverage employees and $7.25 per hour for personal care employees. Those are the federal minimum wage rates used for this credit calculation. The higher your employees' base wages, the larger your creditable tip pool. Plus, there’s no cap on the credit amount (although the overall General Business Credit limit still applies).
When to act: Year-round. Ensure tip income is being accurately reported through payroll.
How to claim: Complete and attach Form 8846 to your business tax return.
Employer Credit for Paid Family and Medical Leave
🤓 Nerdy take: This one’s an easy one to grab if you plan and act accordingly. If you don't have a qualifying written FMLA policy yet, put one in place now to protect any leave your employees take for the rest of 2026.
Who qualifies: Employers with a written policy providing two or more weeks of paid FMLA leave per year with at least 50% wage replacement to qualifying employees. You cannot claim the credit for employees who earn above a certain threshold.
What it’s worth: 12.5% to 25% of wages paid during leave, depending on the wage-replacement rate provided (higher replacement = higher credit).
When to act: Write the policy before you pay the leave. You cannot claim retroactively for leave taken before the policy was in place.
How to claim: Complete and attach Form 8994 to your business tax return.
🤓 Nerdy take: This is one any qualified business owner offering health insurance should try for. It can be especially easy to claim this credit if you work with a payroll company that provides the health benefits for your company.
“Because the payroll company works hand-in-hand with the health insurance company,” Paul Miller, managing partner at Miller & Company, LLP, a tax accounting firm operating in New York City, Washington, D.C. and Sarasota, Florida, says. “They know your payroll size, they know the number of employees that you have, they know how much your employees are making.” Often a big payroll company “like ADP can handle your small-business health tax credit,” Miller says. (“They can handle the retirement credit, [too].”)
Who qualifies: Employers offering a qualifying Small Business Health Options Program (SHOP) Marketplace plan covering 50% or more of employee premiums. You must have fewer than 25 full-time equivalent employees and pay average annual wages of less than $67,000 to each.
What it’s worth: Up to 50% of premiums paid (35% for tax-exempt employers).
When to act: At open enrollment or when choosing a health plan. You must use the SHOP Marketplace to qualify.
How to claim: Complete and attach Form 8941 to your business tax return.
Credit for Employer-Provided Child Care Facilities and Services
🤓 Nerdy take: If you offer employee childcare facilities or services, take advantage of this one! And if you don’t currently offer those services, seriously consider adding them to your list of employee benefits. Your bank account will thank you come tax time, but more importantly, you’ll stand to increase employee attendance, retention and loyalty.
Who qualifies: Employers paying for or providing childcare facilities or services for employees.
What it’s worth: 40% of qualified child care expenses (50% for businesses that fit the IRS definition of a small business) plus 10% of qualified child care resource and referral expenses. This credit maxes out at $500,000 for most businesses, $600,000 for eligible small businesses.
When to act: Before December 31. Qualifying childcare expenses must be incurred within the tax year.
How to claim: Complete and attach Form 8882 to your business tax return.
Credit for Small Employer Pension Plan Startup Costs
🤓 Nerdy take: An employer-provided retirement plan is often one of the top benefits to recruit and retain employees. Show how much you appreciate your people and their hard work. Get a retirement plan in place before the end of the year to reap the credit benefits for the next few years.
Who qualifies: Employers with 100 or fewer employees who were paid at least $5,000 in the prior year and had no retirement plan in the prior three years.
What it’s worth: 100% of plan startup costs for employers with fewer than 50 employees, or 50% for those with 51-100 employees. This credit is capped at $5,000 per year for the first three years ($15,000 total).
When to act: Before December 31. You must establish a new 401(k), simple IRA, SEP IRA or similar qualifying plan within the tax year to claim it on your 2026 return.
How to claim: Complete and attach Form 8881 to your business tax return.
Auto-Enrollment Tax Credit
🤓 Nerdy take: If you’re standing up a retirement plan and intend to capitalize on the pension plan credit above, take it one step further and add auto-enrollment to the new plan. You can even use the same form for this and the credit above. And if you already have a retirement plan in place, take a few minutes to claim this no-brainer credit.
Who qualifies: Any employer that adds automatic enrollment to a new or existing qualifying retirement plan.
What it’s worth: $500/year for up to three years ($1,500 total).
When to act: Before December 31. The auto-enrollment feature must be added within the tax year.
How to claim: Complete and attach Form 8881 to your business tax return.
Disabled Access Credit
🤓 Nerdy take: Act on this credit! Making your business easily accessible to all customers is just good business sense. Think of an investment in accessibility as an investment in your customer base. You’re eligible for this credit every year as long as you make qualifying accessibility improvements to your business. And the list of eligible expenses includes a whole lot more than simply installing a ramp.
Who qualifies: Businesses that have paid or incurred expenses to make the business accessible for individuals with disabilities. You must have $1 million or less in gross receipts in the prior year or a maximum of 30 full-time employees.
What it’s worth: 50% of eligible access expenditures between $250 and $10,250, for a maximum credit of $5,000.
When to act: Before December 31. Improvements must be made within the tax year. This credit can be claimed annually for ongoing projects.
How to claim: Complete and attach Form 8826 to your business tax return.
Work Opportunity Tax Credit (WOTC) – currently lapsed
🤓 Nerdy take: Keep this one on your radar, even though it’s technically lapsed (meaning it’s only relevant to the 2025 tax year at the moment). Congress has retroactively reinstated this credit several times over the years. So continue screening and documenting new hires in the event it’s reinstated again.
Who qualifies: Employers who hire employees from targeted groups, for example, veterans, former felons and Supplemental Nutrition Assistance Program (SNAP) benefit recipients.
What it’s worth: Up to $9,600 per qualifying veteran hire, and up to $2,400 for most other groups.
When to act: Use Form 8850 to pre-screen new hires in the event the credit is reinstated.
How to claim: Complete and attach Form 5884 to your business tax return if this credit is reinstated.
Feeling overwhelmed? I don’t blame you.
If understanding the complexities of business taxes and attempting to claim credits on your own leaves you feeling confused and exhausted, consider hiring a tax professional. Enrolled agents, certified public accountants (CPAs) and attorneys specializing in business taxes are here to help you.
Frequently Asked Questions
What is a small-business tax credit?
A small-business tax credit is a powerful way to directly reduce your tax bill. Claiming a tax credit on your annual tax return reduces your bill by the credit amount on a dollar-for-dollar basis. So claiming a tax credit of $5,000 on a $20,000 tax bill, reduces what you actually owe to $15,000.
How are tax credits different from tax deductions?
Tax deductions decrease your taxable income, which can put you in a lower tax bracket if you report business income on your personal tax return. Tax credits reduce your tax bill on a dollar-for-dollar basis.
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