Reviewing Business Tax Incentives Under Current Law
Updated September 5, 2026.
A useful tax-incentive review starts with the company’s actual activities, tax year and documentation. A program appearing on an old list may have expired, changed or never become law. This article replaces a dated list that mixed tax credits with deductions, investment provisions and a legislative proposal.
Separate credits from deductions
A credit reduces tax subject to its own limits. A deduction reduces taxable income. Research credits, depreciation deductions and state pass-through entity tax elections therefore require different calculations. A project or expenditure does not qualify merely because it belongs to an industry mentioned in a program description.
Check the eligible period before assuming a benefit
The IRS currently describes the Work Opportunity Tax Credit as applying to eligible individuals who began work on or before December 31, 2025. Do not assume a 2026 hire qualifies without confirming an extension and its effective dates. Prior-year eligibility and certification deadlines require separate review.
California’s 2020 small-business hiring credit was a pandemic-era program with a closed reservation period. It should not be presented as an open incentive for new hiring. Likewise, language describing what a proposed bill “would” provide is not evidence of an enacted credit.
Make the review specific to the business
Ask the CPA to identify the enacted provision, eligible tax year, qualifying activity, records needed, filing deadline and limits on using or carrying the benefit. For a state election, include the owner-level consequences and current federal rules. Evaluate professional fees and administration against the expected usable benefit.
For an established business owner, the value comes from connecting the rules to current operations and substantiating the claim. A smaller set of well-supported opportunities is more useful than a long list that assumes every program is available.
Sources for this update: IRS Work Opportunity Tax Credit; California 2020 small-business hiring credit.
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