Can you write off ChatGPT API credits for a SaaS side project?

Generally, yes — ChatGPT API credits used for a real SaaS side project are often deductible as a business expense if the project is being run as a genuine business and the cost is ordinary and necessary for that business.

A few important caveats:

• Business vs. hobby: if the project is really a hobby, the tax treatment is different and deductions may be limited or unavailable.
• Startup phase: if you’re still before launch, some expenses may be treated as startup costs rather than normal operating expenses. In the U.S., up to $5,000 of qualifying startup costs can generally be deducted in the first year of active operations, with the rest typically amortized.
• Software-development rules: some development-related costs can be subject to capitalization or amortization rules, so not every SaaS expense is automatically deductible in the year you pay it.

For a typical U.S. sole proprietor or single-member LLC taxed as a sole proprietor, these costs are usually reported on Schedule C of Form 1040.

Practical steps:

• Keep invoices and payment records from OpenAI.
• Keep the API usage tied to the business purpose.
• Use a separate business bank account or card if possible.
• Ask a CPA or tax professional how to classify pre-launch and development expenses on your return.

So the short answer is: usually yes, but the exact deduction depends on whether the project is a real business and how the expense is classified for tax purposes.