Top 2025 Tax Credits for Small Business Owners
Running a small business isn’t easy—every dollar counts. The good news? The tax code is full of credits designed specifically for business owners to offset costs, reward innovation, and encourage growth.
Unlike deductions (which reduce taxable income), tax credits directly reduce the tax you owe—dollar for dollar. That makes them some of the most powerful tools for keeping more of what you earn.
Here are the top tax credits small business owners should know about in 2025.
Small Business Health Care Tax Credit
Designed for businesses with fewer than 25 full-time equivalent employees.
Credit of up to 50% of premiums you pay for employee health insurance.
Must buy coverage through the SHOP Marketplace.
Source: IRS Small Business Health Care Tax Credit
Work Opportunity Tax Credit (WOTC)
Credit for hiring individuals from targeted groups (veterans, long-term unemployed, SNAP recipients, etc.).
Credit ranges from $1,200 to $9,600 per eligible hire.
Extended through 2025.
Source: IRS Work Opportunity Tax Credit
Research & Development (R&D) Tax Credit
Available to businesses developing or improving products, processes, or software.
Startups can apply up to $500,000 of the credit against payroll taxes.
Not just for “tech”—construction, manufacturing, and design firms often qualify.
Source: IRS R&D Credit
Paid Family and Medical Leave Credit
If you voluntarily provide paid family and medical leave to employees, you may qualify for a credit of 12.5%–25% of wages paid.
Applies to qualifying leave under the Family and Medical Leave Act (FMLA).
Source: IRS Paid Family and Medical Leave Credit
Disabled Access Credit
Credit for small businesses making their facilities accessible for individuals with disabilities.
Covers 50% of eligible expenses up to $10,000 (max credit: $5,000).
Source: IRS Disabled Access Credit
Energy-Efficient Tax Credits (179D / 45L)
179D: Commercial building energy-efficiency deduction (for owners and designers).
45L: Credit for builders of energy-efficient residential homes.
Amounts vary but can reach thousands per project.
Source: IRS Energy Efficient Credits
Employer-Provided Child Care Credit
Businesses providing child care facilities or contracts for employees can claim a credit of up to 25% of qualified expenses plus 10% of resource and referral costs.
Max credit: $150,000 per year.
Source: IRS Employer-Provided Child Care Credit
Why These Credits Matter
Dollar-for-dollar savings: A $5,000 credit reduces your tax bill by $5,000.
Cash flow boost: Some credits can offset payroll taxes, freeing up working capital.
Growth incentive: Many credits encourage hiring, innovation, or reinvestment—helping you grow faster.
Smart Planning Tips for 2025
Document everything: Credits often require certifications or proof (e.g., WOTC hires, R&D activity logs).
Stack credits strategically: Some can be combined with deductions for double impact.
Review eligibility annually: Rules and thresholds change—don’t assume last year’s strategy works in 2025.
Use a tax strategist: Credits are one of the most overlooked areas where business owners leave money on the table.
Tax credits are one of the most powerful tools for small businesses—but also one of the most underutilized. In 2025, make sure you’re not leaving money on the table.
Want to identify which credits your business qualifies for and build a strategy around them? Book a consultation.
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1. Do I need employees to claim credits?
Some credits (like health care or WOTC) require employees. Others (like R&D) may apply to sole proprietors and small startups.2. Can I claim credits and deductions together?
Yes—credits reduce your tax bill directly, while deductions lower taxable income. Both can be used.3. Are credits refundable?
Most are non-refundable, but unused amounts may carry forward (e.g., R&D credit).4. What’s the difference between a deduction and a credit?
Deductions lower taxable income; credits reduce taxes owed dollar for dollar. Credits are usually more powerful.5. How do I know which credits I qualify for?
Check IRS resources—or consult a tax strategist to review eligibility based on your business structure and activities.
Join the 2025 Tax Season Waitlist today: tbtxsolutions.com/join
