The Top Tax Credits Small Businesses Should Know About in 2025

Small business owners often miss out on valuable tax credits that could save them thousands. Unlike deductions, which reduce taxable income, tax credits provide a dollar-for-dollar reduction of your tax bill. As we enter 2025, here are some of the top credits to keep on your radar and how Shelley at ASL Tax can help you take full advantage of them.

1. Work Opportunity Tax Credit (WOTC)

If your business hires employees from certain target groups, such as veterans, long-term unemployed individuals, or recipients of government assistance, you could qualify for the WOTC.

Potential Savings:Credits can range from $1,200 to $9,600 per employee, depending on the employee’s background and hours worked.

2. Research and Development (R&D) Tax Credit

Even small businesses can claim this credit if they’re investing in innovation. Qualifying activities include improving products, processes, or software.

Pro Tip:Startups can offset payroll taxes with this credit, even if they aren’t yet profitable.

3. Employer-Provided Child Care Credit

If your business provides childcare facilities or subsidies for employees, you can claim up to 25% of those expenses as a tax credit.

Bonus:This credit also helps attract and retain top talent.

4. Energy Efficiency Tax Credits

Installing energy-efficient equipment or retrofitting your building with eco-friendly systems can qualify your business for credits. These incentives help reduce your carbon footprint while saving you money.

5. Paid Family and Medical Leave Credit

Businesses offering paid family and medical leave to employees can claim a credit of up to 25% of wages paid during the leave period.

Eligibility Tip:Ensure your leave policy meets the IRS requirements to qualify.

How to Claim These Credits

Navigating tax credits can be tricky, as they often have specific requirements and documentation. Working with an experienced tax professional ensures you don’t miss out on valuable opportunities.

How Shelley Can Help

Shelley has over a decade of experience helping small business owners uncover and claim the tax credits they qualify for. Whether you need guidance on eligibility or assistance with filing, Shelley will make sure you get the maximum savings possible.

Curious about the tax credits your business qualifies for in 2025? Schedule a consultation today and let Shelley guide you through the process.