IRS Form 3800 Instructions
As an incentive for small business owners to create and grow businesses, the Internal Revenue Service allows for certain tax deductions and federal income tax credits. Most of these small business tax credits are reported on a variety of tax forms, then consolidated on IRS Form 3800, General Business Credit.
In this article, we’ll walk through this tax form in depth, to include:
- How to complete IRS Form 3800
- Different tax credits available
- Frequently asked questions about claiming business credits
Let’s start by going IRS Form 3800, step by step.
Table of contents
How do I complete IRS Form 3800?
There are three parts to this tax form:
- Part I: Current year credit for credits not allowed against tentative minimum tax
- Part II: Allowable credit
- Part III: General business credits or eligible small business credits
Although these Form 3800 instructions will go in chronological order, it’s important to note that before starting Part I, you must complete Part III. Once you’ve completed Part III, you can then come back to begin Part I.
Part I: Current Year Credit for Credits Not Allowed Against Tentative Minimum Tax (TMT)
Once you’ve completed all Parts III, you can start here in Part I.
Line 1: General business credit
Line 1 contains general business credits. You’ll carry up all general business credits from Line 2 in the Part III fields with Box A checked.
Line 2: Passive activity credits
Line 2 contains passive activity credits. You’ll carry up all passive activity credits from Line 2 in the Part III fields with Box B checked.
Line 3: Applicable passive activity credits allowed
In Line 3, you’ll enter the applicable passive activity credit amount allowed from IRS Form 8582-CR, Passive Activity Credit Limitations, or IRS Form 8810, Corporate Passive Activity Loss and Credit Limitations.
The passive activity credit amount allowed in this line only applies to the general business credits not allowed against TMT in Line 2, plus any prior year unallowed passive activity. If the amount of applicable credits is zero, enter ‘0.’
Line 4: Carryforward of general business credit to current tax year
Enter any carryforwards of unused tax credits from Part III, Line 2, with Box C checked. For each tax credit carried forward from a prior tax year, you will need to attach a required statement containing the following information:
- Tax year that the credit originated
- Amount of credit reported on original income tax return
- Whether the total carryforward amount was changed from the original amoutn
- Type of credit involved
In your statement, for each carryback year, you also need to show the year and the amount of allowed credit after you applied the carryback. For each carryforward year, show the tax year and the amount of the tax credit carryforward allowed for the year.
Line 5: Carryback of general business credit from future tax year
You will only enter an amount in Line 5 if carrying back business credits from future tax years. Enter the amount reported from Line 2 of Part III with box D checked.
Line 6: Total general business credits
Enter the total of the following lines:
Part II: Allowable Credit
In Part II, you’ll calculate the total allowable credit that you can take in the current year.
Line 7: regular tax before credits
In Line 7, enter your regular tax liability for the year, which you’ll find on your regular tax return.
Individuals
Individual taxpayers should enter the amounts from the following lines:
- IRS Form 1040, 1040-SR, or 1040-NR: Line 16
- Schedule 2: Line 2
Corporations
Corporate shareholders will enter the amount found on IRS Form 1120, Schedule J, Part I, Line 2.
Estates & trusts
Estates and trusts will enter the sum of the following lines:
- IRS Form 1041, Schedule G: Line 1a & Line 1b
- IRS Form 8978: Line 1d
Line 8: Alternative minimum tax
If applicable, individuals will find their AMT liability on Line 11 of IRS Form 6251, Alternative Minimum Tax. Estates and trusts will find AMT on Schedule I (IRS Form 1041), Line 54.
Line 9
Combine the totals of Line 7 & Line 8.
Line 10
In Line 10a, enter the total foreign tax credit as found on IRS Form 1116, Foreign Tax Credit. Corporate taxpayers will find their foreign tax credit on IRS Form 1118, Foreign Tax Credit for Corporations.
For Line 10b, enter the total allowable credit, determined as follows:
Individuals
Individuals should enter the amount from:
- IRS Form 1040, 1040-SR, or 1040-NR: Line 19
- Schedule 3: Lines 2 through 5, plus Line 7
Estates & trusts
Estates & trusts will enter the total of any write-in credits from IRS Form Schedule G, Line 2e.
Corporations
Corporate taxpayers should enter the amount from IRS Form 1120, Schedule J, Part I, Line 5b. Corporations reporting on Form 8978 should also include the amount on Schedule J, Line 6 on Line 10b.
If Line 11 is zero or less, the corporation has no net income tax for the year. Enter zero on Line 11, skip Lines 12 through 15, and enter ‘0’ on Line 16.
Non-pass-through partners
Partners other than pass-through entities (like partnerships or S-corporations) use IRS Form 8978 and its accompanying Schedule A to calculate the tax in their reporting year from adjustments shown on IRS Form 8986.
Partners do not use Form 3800 to report changes to credits reported on Form 8986. Instead, these changes will be calculated and reported on Form 8978.
Do not duplicate any adjustments to credits on Form 3800. However, carryforward credit amounts after the first affected year and any intervening years are reported on Form 3800 as carryforwards in future tax years.
For Line 10c, combine Lines 10a and 10b.
Line 11: Net income tax
Subtract Line 10c from Line 9. If zero or less, skip Lines 12 through 15 and enter ‘0’ on Line 16.
Line 12: Net regular tax
Subtract Line 10c from Line 7. If zero or less, enter ‘0.’
Line 13
Subtract $25,000 from the number in Line 12. If the result is a positive number, multiply the result by 25% and enter this number in Line 13.
Internal Revenue Code Section 38(c)(6) may apply to the following taxpayers:
- Married couples filing separate returns
- Controlled corporate groups
- Regulated investment companies
- Real estate investment trusts (REITs)
- Estates
- Trusts
Line 14: Tentative minimum tax
To calculate tentative minimum tax, taxpayers should do the following:
- Individuals: Enter the amount from IRS Form 6251, Line 9
- Corporations: Enter ‘0’
- Estates & trusts: Enter the amount from Schedule I (IRS Form 1041), Line 52
Line 15
Enter the greater of:
Line 16
Subtract Line 15 from Line 11. If the result is 0 or less, enter ‘0.’
Line 17
Enter the smaller of:
For corporations, special rules may apply if there has been an ownership change, acquisition, or reorganization. See the form instructions for additional details.
Line 18
Before completing Lines 18 through 25, you should check to see if any of the following conditions apply:
- An amount is entered for the empowerment zone employment credit on Line 3 of Part(s) III with Box A, B, C, or D checked
- Any amount is entered for the renewal community employment tax credit on Line 3 of Part III with Box C checked
- You have prior year unallowed passive activity credit carryover for the empowerment zone or renewal community employment credit
If any of the above conditions apply, multiply Part II, Line 14 by 75% and enter the result in Line 18. Otherwise, do the following:
Line 19
Enter the greater of the following:
Line 20
Subtract Line 19 from Line 11. If this results in zero or a negative number, enter ‘0.’
Line 21
In Line 21, subtract Line 17 from Line 20. If the result is zero or less, enter ‘0.’
Line 22
Combine the amounts from Line 3 of all Parts III with either Box A, C, or D checked.
Line 23
Combine the amounts from Line 3 of all Parts III with Box B checked.
Line 24: Applicable passive activity credit allowed
Enter the applicable passive activity credit allowed for the empowerment zone and renewal community employment credit allowed from either Form 8582-CR or Form 8810.
This only applies to empowerment zone and renewal community employment credits reported on Line 3, plus any prior year unallowed passive activity empowerment zone and renewal community employment credits.
If no credits are allowed, enter zero.
Line 25
Enter the sum of the following lines:
Line 26: empowerment zone and renewal community employment credit allowed
Enter the smaller of the following:
Line 27
Subtract Line 13 from Line 11. If the result is zero or a negative number, enter ‘0.’
Line 28
Add the following lines:
Line 29
Subtract Line 28 from Line 27. If the result is zero or a negative number, enter ‘0.’
Line 30
Enter the general business credit from Line 5 of all Parts III with Box A checked.
Line 31
Skip Line 31.
Line 32
Enter the applicable passive activity credits from Line 5 of all Parts III with Box B checked.
Line 33
Enter the applicable passive activity credit for general business credits allowed against TMT and eligible small business credits allowed from Form 8582-CR or Form 8810.
Line 34: Business credit carryforward
Enter the amount of carryforwards to the current tax year of unused credits reported on:
Line 35: Carry back of business credit from future tax year
Only use this line when filing an amended return to carryback unused credits from a future tax year.
Enter the amount reported from Line 5 of Part III with Box D checked.
Line 36
Enter the sum of the following lines:
Line 37
Enter the smaller of the following:
Line 38: Credit allowed in the current tax year
Add Line 28 and Line 37. Compare this number to the sum of the following lines:
If the number in Line 38 is smaller than the sum of the other lines, enter the Line 38 figure as indicated on your tax return:
- Individuals: Form 1040, Schedule 3, Line 6
- Corporations: Form 1120, Schedule J, Part I, Line 5c
- Estates & Trusts: Form 1041, Schedule G, Line 2b
If the Line 38 number is larger than the sum of the other lines, you may have a carryforward or carryback of tax credits that you cannot use in the current year. Refer to the form instructions on how to allocate unused credits.
Part III: General Business Credits or Eligible Small Business Credits
Top section
In the top section, select one of the boxes for the applicable business credit:
- Box A: General Business Credit from a Non-Passive Activity
- Box B: General Business Credit from a Passive Activity
- Box C: General Business Credit Carryforwards
- Box D: General Business Credit Carrybacks
- Box G: Eligible Small Business Credit Carryforwards
If you are looking to claim credits from different categories, you will have to complete a separate Part III for each box.
For example, you may need to check Box A on Part III to claim a general business tax credit from a non-passive activity. If you also need to report carryforward credits on Box C, you will need to create a new Part III to report those credits as well.
You may also need to combine amounts from multiple Parts III with either Box A or Box B checked. From there, you will combine the total amount of business tax credits on a consolidated Part III. If this is the case, check the box to the lower right hand side, just above Line 1.
Limitations for certain credits
Before reporting individual credits, it’s worth noting that some credits come with dollar limitations. These credits include:
- IRS Form 3468, Part III, Line 12x: There is a $4,000 limit on qualified small wind energy property
- IRS Form 8826, Line 8: A $5,000 limit applies to the overall tax credit as reported on Part III, Line 1e
- IRS Form 8882, Line 7: A $150,000 limit applies to the overall tax credit reported on Part III, Line 1k
Line 1
In Line 1, you’ll enter the applicable tax credit for each row, in column (c). If you are claiming the tax credit from a pass-through entity such as a partnership or S corporation, then you’ll also enter the employer identification number of that passthrough entity in column (b).
If there is any line where that particular credit comes from more than one source, you must file a separate Part III for each passthrough entity.
Line 1a: Investment Tax credit
For cooperatives as described in IRC Section 1381(a), special rules may apply. You must allocate any excess investment credit (above your tax liability limit) to your patrons. Refer to the form instructions for calculating this excess tax credit if this situation applies to you.
Line 1b: Advanced manufacturing production credit
Enter the amount of advanced manufacturing production credit calculated on IRS Form 7207.
Line 1c: Credit for Increasing research activities
A qualified small business must complete Form 3800 before completing Section D of IRS Form 6765 if claiming the payroll tax credit.
Eligible small businesses will the amount of tax credit for increasing research activities calculated on IRS Form 6765 on Line 4i, below. All other taxpayers will enter their research credit on Line 1c.
For individuals, the amount of research credit that you can claim on either Line 1c or Line 4i is limited to the amount of tax attributable to your taxable income from the sole proprietorship or your interest in the pass-through entity.
To calculate this credit limit, divide your taxable income attributable to your passthrough entity by the total taxable income for the year. Multiply this fraction by the dollar amount in Line 11. This represents the amount of the credit you may claim this year.
Line 1d: Low-income housing
You may only report the carryforward of unused credits filed on IRS Form 8586 in previous years on Line 1d.
Line 1e: Disabled access
When reporting disabled access credit calculated on IRS Form 8826, do not enter more than $5,000 in column (c) of all combined Parts III.
Line 1f: Renewable electricity production
Cooperatives, estates, and trusts: Enter the applicable part of the amount from IRS Form 8835, Line 22.
All other taxpayers: Enter the applicable part from Form 8835, Line 20.
Do not enter any amounts already included on Part III, Line 4e, below.
Line 1g: Indian employment
Enter the amount of Indian employment tax credit calculated on IRS Form 8845.
Line 1h: Orphan dtrug
Enter the amount of orphan drug credit claimed on IRS Form 8820.
Line 1i: new markets
Enter the amount of new markets tax credit calculated on IRS Form 8874.
Line 1j: Small employer pension plan startup costs and auto-enrollment
When reporting the tax credit for small employer pension plan start up costs and auto-enrollment for retirement savings, enter the combined amounts from IRS Form 8881:
- Part I, Line 8
- Part II, Line 11
Line 1k: Employer-provided child care facilities and services
If reporting the tax credit for employer-provided child care facilities and services from IRS Form 8882, do not enter more than $150,000 in column (c) on all combined Parts III.
Line 1l: Biodiesel, renewable diesel, or sustainable aviation fuel
Enter the amount of biodiesel, renewable diesel, or sustainable aviation fuel credit calculated on IRS Form 8864.
Line 1m: Low sulfur diesel fuel production
Enter the amount of low sulfur diesel fuel production tax credit calculated on IRS Form 8896.
Line 1n: Distilled spirits
Enter the amount of distilled spirits credit calculated on IRS Form 8906.
Line 1o: Nonconventional source fuel
You may only claim carryforward amounts of the nonconventional source fuel credit as reported on IRS Form 8907.
Line 1p: Energy efficient home
Enter the amount of energy efficient home tax credit calculated on IRS Form 8908.
Line 1q: Energy efficient appliance
You may only claim carryforward amounts of the energy efficient appliance credit reported on IRS Form 8909.
Line 1r: Alternative motor vehicle
Enter the amount of alternative motor vehicle credit calculated on IRS Form 8910.
Line 1s: Alternative fuel vehicle refueling property
Enter the amount of alternative fuel vehicle refueling property tax credit calculated on IRS Form 8911.
Line 1t: Enhanced oil recovery
Enter the amount of enhanced oil recovery credit claimed on IRS Form 8830.
Line 1u: Mine rescue team training
Enter the amount of mine rescue team training credit reported on IRS Form 8923.
Line 1v: Agricultural chemicals security
You may only claim carryforward amounts of the agricultural chemicals tax credit reported on IRS Form 8931.
Line 1w: Employer differential wage payments
Enter the amount of employer differential wage payments claimed on IRS Form 8932.
Line 1x: Carbon oxide sequestration
Enter the amount of carbon oxide sequestration credit as calculated on IRS Form 8933.
Line 1y: Qualified plug-in electric drive motor vehicle
Enter the amount of qualified plug-in electric drive motor vehicle tax credit from IRS Form 8936.
Line 1z: Qualified plug-in electric vehicle
You may only claim carryforward amounts of qualified plug-in electric vehicle credit reported on IRS Form 8834 from tax years 2009 through 2012.
Line 1aa: Employee retention
Report the employee retention credit from IRS Form 5884-A.
Line 1bb: General credits from an electing large partnership
You may only claim carryforward amounts of general credits from an electing large partnership on Line 1bb.
Line 1zz: Other credits
Line 1zz is used to report:
- Tax credits for oil and gas production from marginal wells as calculated on IRS Form 8904, or from the applicable line as reported on Schedule K-1
- Carryforwards of certain other tax credits
Carryforward of tax credits
Check Box C and enter applicable amounts to claim the following unused tax credits from prior years:
- IRS Form 5884 for years prior to 2007
- IRS Form 6478 for years prior to 2005
- IRS Form 8846 for years prior to 2007
- IRS Form 8900 for years prior to 2008
Additionally, you may use Line 1zz to claim carryforwards of the following credits:
- Trans-Alaska pipeline liability fund credit
- IRS Form 5884-A, Employee Retention Credit for Employers Affected by Qualified Disasters
- Credit for employers affected by Hurricane Katrina, Rita, or Wilma: Section A only
- Hurricane Katrina housing credit: Section A only
- Credit for affected Midwestern disaster area employers: Section A only
- Employer housing credit: Section B only
- IRS Form 5884-B: New hire retention credit
- IRS Form 8847: Credit for contributions to selected community development corporations
- IRS Form 8861: Welfare-to-work credit
- IRS Form 8884: New York Liberty Zone business employee credit
- IRS Form 8942: Therapeutic drug credit
Line 2
In Line 2, add all lines from Line 1. Enter the result here and on the applicable line of Part I.
Line 3
Enter any carryforward of the renewal community employment tax credit from IRS Form 8844 here and on the applicable line of Part II.
Line 4
Here, you’ll enter the amount of the specified credit on the applicable line.
Line 4a: Investment
Report the investment tax credit as reported on IRS Form 3468, as applicable.
There is a $4,000 limit for qualified small wind energy property. For cooperatives, see the guidance outlined on Line 1a.
Line 4b: Work opportunity
Report the work opportunity credit from IRS Form 5884.
Line 4c: Biofuel producer
Report the biofuel producer tax credit reported on IRS Form 6478.
Line 4d: Low-income housing
Report the low-income housing credit from IRS Form 8586.
Line 4e: Renewable electricity production
Report the renewable electricity production credit from IRS Form 8835.
Line 4f: Employer Social Security and Medicare taxes paid on certain employee tips
Report the credit for taxes paid as recorded on from IRS Form 8846.
Line 4g: Qualified railroad track maintenance
Report the qualified railroad track maintenance credit from IRS Form 8900.
Line 4h: Small employer health insurance premiums
Report the credit for small employer health insurance premiums as follows:
Tax-exempt eligible small employers (except certain farmers’ cooperatives): Do not report your credit on IRS Form 3800. Instead, report this on IRS Form 990-T, Exempt Organization Business Income Tax Return.
If your only source of credit for Line 4h is from pass-through entities, do not complete IRS Form 8941. Instead, enter the credit directly on Line 4h.
Otherwise, enter the credit from either Line 16 or Line 18 on Form 8941.
Line 4i: Increasing research activities
Report the increasing research activities tax credit from IRS Form 6765.
Line 4j: Employer credit for paid family and medical leave
Report the employer credit for paid family and medical leave from IRS Form 8994.
Line 4z: other
This line is reserved for future use. Do not use Line 4z to report tax credits.
Line 5
Add Lines 4a through 4z. Enter the total on Line 5 and the applicable line in Part II.
Line 6
Add the following lines from Part III:
Enter the result here and on the applicable line of Part II.
Video walkthrough
Watch this instructional video for more detail on claiming business credits with IRS Form 3800.
Frequently asked questions
IRS Form 3800 may contain tax credits from multiple tax years. The proper order for using tax credits in a given year is: carryforwards (earliest years first), general business credit earned in the current year, carrybacks from a future taxable year.
Some tax credits may only be available to an eligible small business. An eligible small business can be a partnership, sole proprietorship, or corporation whose stock is not publicly traded. For the 3-year period prior to the year of the credit, gross receipts cannot exceed an average of $50 million per year.
Depending on your situation, there may be multiple Parts III. The IRS instructions state that you should place your pages in the following order: Page 1, Page 2, Part III with Box I checked, All Parts III with Box A checked, All Parts III with Box B checked, Part III with Box C checked, Part III with Box D checked, and Part III with Box G checked.
Where can I find IRS Form 3800?
You may download this tax form from the IRS website. For your convenience, we’ve attached the latest version of this document as a PDF file in this article.
Related tax articles
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