Frequently Asked Questions
Who is eligible for the Small Business AMT Credit Offset?
Non-publicly traded corporations, partnerships, or sole proprietorships with average annual gross receipts of $50 million or less for the prior 3 years.
How does the Small Business AMT Credit Offset work?
Eligible small businesses can use the Research Credit (Section 41) to offset Alternative Minimum Tax (AMT) liability, which is normally restricted for other taxpayers.
What law authorizes the Small Business AMT Credit Offset?
The Small Business AMT Credit Offset is authorized under IRC §38(c)(4) of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §38
Source: Internal Revenue Code, Title 26, United States Code
§ 38. General business credit(a) Allowance of creditThere shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of—(1) the business credit carryforwards carried to such taxable year,
(2) the amount of the current year business credit, plus
(3) the business credit carrybacks carried to such taxable year.
(b) Current year business creditFor purposes of this subpart, the amount of the current year business credit is the sum of the following credits determined for the taxable year:(1) the investment credit determined under section 46,
(2) the work opportunity credit determined under section 51(a),
(3) the alcohol fuels credit determined under section 40(a),
(4) the research credit determined under section 41(a),
(5) the low-income housing credit determined under section 42(a),
(6) the enhanced oil recovery credit under section 43(a),
(7) in the case of an eligible small business (as defined in section 44(b)), the disabled access credit determined under section 44(a),
(8) the renewable electricity production credit under section 45(a),
(9) the empowerment zone employment credit determined under section 1396(a),
(10) the Indian employment credit as determined under section 45A(a),
(11) the employer social security credit determined under section 45B(a),
(12) the orphan drug credit determined under section 45C(a),
(13) the new markets tax credit determined under section 45D(a),
(14) in the case of an eligible employer (as defined in section 45E(c)), the small employer pension plan startup cost credit determined under section 45E(a),
(15) the employer-provided child care credit determined under section 45F(a),
(16) the railroad track maintenance credit determined under section 45G(a),
(17) the biodiesel fuels credit determined under section 40A(a),
(18) the low sulfur diesel fuel production credit determined under section 45H(a),
(19) the marginal oil and gas well production credit determined under section 45I(a),
(20) the distilled spirits credit determined under section 5011(a),
(21) the advanced nuclear power facility production credit determined under section 45J(a),
(22) the nonconventional source production credit determined under section 45K(a),
(23) the new energy efficient home credit determined under section 45L(a),
(24) the portion of the alternative motor vehicle credit to which section 30B(g)(1) applies,
(25) the portion of the alternative fuel vehicle refueling property credit to which section 30C(d)(1) applies,
(26) the mine rescue team training credit determined under section 45N(a),
(27) in the case of an eligible agricultural business (as defined in section 45O(e)), the agricultural chemicals security credit determined under section 45O(a),
(28) the differential wage payment credit determined under section 45P(a),
(29) the carbon dioxide sequestration credit determined under section 45Q(a),
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