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You must file Form 3800 to claim any of the general business credits.
If your only source of credits listed on Form 3800, Part I, is from pass-through entities, you may not be required to complete the source credit form. Instead, you may be able to report the credit directly on Form 3800. For more details, see Part I. Current Year Credit on page 2.
If you cannot use part or all of the credit because of the tax liability limit (line 32 is less than the sum of lines 8, 24, and 30), carry the unused credit back one tax year. To carry back an unused credit, file an amended return (Form 1040X, Amended U.S. Individual Income Tax Return, 1120X, Amended U.S. Corporation Income Tax Return, or other amended return) for the prior tax year or an application for tentative refund (Form 1045, Application for Tentative Refund, or Form 1139, Corporation Application for Tentative Refund). Generally, if you file an application for a tentative refund, it must be filed by the end of the tax year following the tax year in which the credit arose.
Note.
No part of the unused credit for any year attributable to any credit shall be carried back to any tax year before the first tax year for which that credit was first allowable. See Credit Ordering Rule below to determine which credits are allowed first.
If you have an unused credit after carrying it back, carry it forward to each of the 20 tax years after the year of the credit. Any qualified business credits (as defined in section 196(c)) that are unused after the last tax year of the 20-year carryforward period (or at the time an individual taxpayer dies or other taxpayer, such as a corporation or partnership, ceases to exist) may be taken as a deduction in the earlier of:
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The tax year following the last tax year of the 20-year carryforward period or
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The tax year in which the individual taxpayer dies or other taxpayer ceases to exist.
Your general business credit is limited to your tax liability. Therefore, if you filed a joint return in a carryback or carryforward year and your marital status or filing status has changed, you may need to figure your separate tax liability in that carryback or carryforward year. This would apply if:
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You filed as single in the credit year, but filed a joint return in the carryback or carryforward year;
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You filed a joint return in the credit year, but filed a joint return with a different spouse in the carryback or carryforward year; or
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You were married and filed a separate return in the credit year, but filed a joint return with the same or a different spouse in the carryback or carryforward year.
Determine your separate tax liability in the carryback or carryforward year as follows.
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Figure your tax for the carryback or carryforward year as though you were married filing a separate return.
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Figure your spouse's tax in that year as though he or she was married filing a separate return.
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Add the amounts in steps 1 and 2.
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Divide the amount in step 1 by the amount in step 3. The result should be rounded to at least three decimal places.
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Multiply the decimal in step 4 by the total tax shown on your joint return for the carryback or carryforward year. The result is your separate tax liability and a carryback or carryforward credit is applied against this amount only.
Although your carryback or carryforward of the credit is limited to your separate tax liability, the amount of your refund resulting from the carryback or carryforward is further limited to your share of the joint overpayment. This is found by subtracting your separate tax liability (as determined above) from your contribution toward the payment.
Unless you have an agreement or clear evidence of each spouse's contribution toward the payment of the joint liability, your contribution includes the tax withheld on your wages and your share of the joint estimated tax or tax paid with the return. Your share of these payments is found by using the same formula used in determining your separate tax liability. Substitute the joint estimated tax, or tax paid with the return, for the tax in step 5. If the original return for the carryback year resulted in an overpayment, reduce your contribution by your share of the refund.
Attach a copy of the computation to your amended return or application for tentative refund.
General business credits reported on Form 3800 are treated as used on a first-in, first-out basis by offsetting the earliest-earned credits first. Therefore, the order in which the credits are used in any tax year is:
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Carryforwards to that year, the earliest ones first,
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The general business credit earned in that year, and
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The carryback to that year.
When relevant, the components of the general business credit reported on Form 3800 arising in a single tax year are used in the following order.
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Investment credit (in the following order— rehabilitation credit, energy credit, qualifying advanced coal project credit, and qualifying gasification project credit).
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Welfare-to-work credit.
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Credit for increasing research activities.
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Low-income housing credit.
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Disabled access credit.
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Renewable electricity production credit.
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Indian employment credit.
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Orphan drug credit.
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New markets credit.
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Credit for small employer pension plan startup costs.
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Credit for employer-provided child care facilities and services.
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Biodiesel and renewable diesel fuels credit.
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Low sulfur diesel fuel production credit.
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Distilled spirits credit.
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Nonconventional source fuel credit.
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Energy efficient home credit.
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Energy efficient appliance credit.
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Alternative motor vehicle credit.
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Alternative fuel vehicle refueling property credit.
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Credits for affected Midwestern Disaster Area employers.
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Mine rescue team training credit.
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Agricultural chemicals security credit.
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Credit for employer differential wage payments.
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Carbon dioxide sequestration credit.
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Credit for contributions to selected community development corporations.
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General credits from an electing large partnership.
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Empowerment zone and renewal community employment credit.
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Investment credit (in the following order - rehabilitation credit and energy credit).
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Work opportunity credit.
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Alcohol and cellulosic biofuel fuels credit.
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Low income housing credit.
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Renewable electricity, refined coal, and Indian coal production credit.
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Employer social security and Medicare taxes paid on certain employee tips.
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Qualified railroad track maintenance credit.
Although these credits are aggregated on Form 3800, keep a separate record of each credit to ensure proper accounting of the credits.
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