R&D Tax Credit for Qualifying Small Businesses
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.
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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