The Payroll Tax Credit

R&D Tax Credit for Qualifying Small Businesses

Additional source of cash flow for small businesses!

What is the Payroll Tax Credit?

The Payroll Tax Credit is a subset of the R&D Tax Credit that allows qualifying small businesses to reduce the company’s share of their FICA payroll tax liability. The Payroll Tax Credit can provide a source of cash flow at a critical time for startups and small businesses. 

This version of the R&D Credit was created in December 2015 through the Protecting Americans from Tax Hikes (PATH) Act to benefit younger companies with no or a very small income tax liability. The Payroll Tax Credit can be claimed for a maximum of 5 years by a Qualified Small Business.

How to Qualify for Payroll Tax Credits?

  • To be considered a Qualified Small Business, your company did not have gross receipts for any years preceding the 5 tax year period ending with the credit year
  • The gross receipts must be below $5M per year
  • Each year qualifying companies can claim a maximum of $250K, or a total of $1.25M across the 5 years

What can this mean for your business?

  • Immediate reduction in your payroll tax liability
  • Credits banked for future payroll tax liability
  • Increased valuation
  • Freeing up cash to re-invest
Webinar

R&D Tax Credit for Startups

Startups and small businesses comprise the vast majority of companies in the US. One frequently overlooked incentive for startups is the Research and Development (R&D) Tax Credit. The definition of R&D is incredibly broad, much…

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Ready to Start Claiming?

Get your R&D Claim estimate today!

Ready to Start Claiming?

Get your R&D Claim estimate today!