Get to Know the “Unusual” General Business Credit

May 12, 2025

Tax Tip:

Generally, tax credits are more valuable than tax deductions. Unlike a deduction, which reduces a business’s taxable income, a credit reduces its tax liability dollar for dollar. Tax credits aren’t unlimited, however. For businesses, the aggregate value of tax credits may be limited by the general business credit (GBC), found in Internal Revenue Code Section 38.

The GBC isn’t a tax credit in the usual sense. Rather, it’s a collection of dozens of business-related credits scattered throughout the tax code. It consists of more than 30 individual tax credits that provide incentives for various business activities. Each credit must be claimed separately, according to its specific rules and using the relevant tax forms. Taxpayers that claim more than one credit, however, must also file Form 3800 to report the aggregate value of those credits and calculate the overall allowable credit under the GBC.

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