IRS changes on ERC: Why don’t all Businesses Qualify for the credit? Learn more !

Payroll Tax Credit:
Receive a credit of up to $2.5M

Startups with less than $5 million in gross receipts can use the R&D tax credit to offset their payroll tax liability.

What is the Payroll Tax Credit?

This version of the R&D Tax Credit was created in 2015 through the Protecting Americans from Tax Hikes (PATH) Act to benefit younger companies with no or little income tax liability. While this credit cannot be claimed retroactively, it allows companies who invest resources in Research and Development (R&D) to qualify for an R&D tax credit. For 2022, you can potentially claim up to $250,000 and for 2023 moving forward, you can potentially claim up to $500,000. The Payroll Tax Credit can be claimed for a maximum of 5 years and must be filed timely, allowing startups and small businesses to reduce their payroll taxes.

If your company pays income taxes, you may qualify for the R&D Tax Credit.

What can the Payroll R&D Tax Credit do for your business?

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    Immediate reduction in your payroll tax liability

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    Secure credits for future tax liabilities

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    Increased business valuation

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    Freeing up cash for your business

The REV Advantage

Leyton powered by REV is a cutting-edge tax credit service that combines technology with our best-in-class tax team. Through integrations and an easy-to-use interface, startups and small businesses can claim tax credits.

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    Summary Dashboard

    Our expert tax team uses a proven, tech-enabled analysis process to ensure every claim is accurate, complete, and audit defensible.

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    Collaborative Approach

    Working with your internal team and existing CPAs, we’ll determine the best way to achieve your company’s goals.

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    Always Accessible

    Merging user-friendly features with innovative technology, the REV platform allows you to save time through secures exchanges and obtain visibility of all processes.

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    Maximize your Returns

    We help you maximize your credits, so you never have to worry about leaving money on the table. Plus, you only pay if you qualify.

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    Easy Integrations

    Quickly sync your payroll and accounting software to share relevant business data and information.

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    Reinvest in your Business

    Get money back from the IRS — and use it however you’d like! Hire new talent, launch a new project, or elongate your runway.

Great People
Define our Success

Meet our team of Tax and Technical experts who can help you claim up to $250,000 for your current year filing or reduce payroll tax liability!

Matthew Demerle, JD Law

Tax Attorney

Brigid Lenihan, M.Sc. Tax

Senior Tax Manager

Jennifer Bolton, LL.M Taxation, J.D, B.A.

Head of Tax

FAQs

Everything you need to know about the Payroll Tax Credit

Can’t find the answer you’re looking for? Please contact our team

Can I still qualify if my company is currently pre-revenue? keyboard_arrow_down keyboard_arrow_up

Yes! Pre-revenue companies are still eligible.

Can my business receive credits for work done in previous years? keyboard_arrow_down keyboard_arrow_up

Yes! You can receive credits for past research and development, however, you will need to reach out to our team before claiming your credit to ensure this work qualifies. The Payroll Tax Credit is only relevant to the most recent tax year. Contact us here!

What if I don’t know exactly how many hours my business has spent on Research and Development? keyboard_arrow_down keyboard_arrow_up

Not to worry — we’ll help you calculate the number of hours, or percentage of the time, your team has spent on research and development. Plus, you can connect your payroll software or manually upload W2 forms to share salary information.

How can I claim the R&D Tax Credit? How can REV help? keyboard_arrow_down keyboard_arrow_up

Our digitized tax tool, REV, makes claiming Tax Credits for your business simpler, easier and more accurate. Once you submit your information, our team will evaluate your claim for accuracy, confirm its eligibility, and prepare a detailed report for you to use when filing your taxes. While our team doesn’t file for you, we’ll provide you with the forms and instructions to maximize your return and ensure your claim is audit defensible.

How can my company use the credit? Are there any limitations? keyboard_arrow_down keyboard_arrow_up

You can use your R&D tax credit however you’d like — to grow your company, hire new talent, reinvest in innovation, and more!

How does the Payroll R&D Credit differ from the regular R&D Credit? keyboard_arrow_down keyboard_arrow_up

The Payroll R&D Credit was created to enable newer and small businesses to find an immediate return on their R&D activities. The federal government outlined special criteria that enable these businesses to claim this credit and immediately apply them to their payroll tax liability as opposed to their income tax liability, which these newer businesses may not have. The regular R&D credit can only be applied against income tax liability.

When will I see the benefits from claiming this R&D Tax Credit? keyboard_arrow_down keyboard_arrow_up

The Payroll R&D Tax Credit is applied the quarter after you claim and will eliminate your payroll tax liability on an ongoing basis until the credit is exhausted. If you have no immediate tax liability, your credits may be carried forward indefinitely. How the credit is applied may depend on your payroll provider.

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