Start-Up Companies Should Consider the R&D Tax Credit

The recently restructured R&D Tax Credit program under the PATH Act now enables eligible “Start-Up Companies” (defined as those with less than $5 million in gross receipts and earning revenue for less than five years) to claim up to $ 250,000 of the credit against the company’s federal payroll tax for tax years beginning after December 31, 2015.

 Before the enactment of the PATH Act, Start-Up Companies with no profits were unable to utilize the R&D tax credit. Now, Start-Up Companies can elect to apply the R&D tax credit against their payroll taxes for up to five years, even if the company remains unprofitable. This allows Start-Up Companies to apply their credits against federal payroll taxes to free up much needed cash to continue product development efforts and continue growing their companies.

 Veracity’s professionals are available today to discuss the R&D changes within the PATH Act, which will lead your clients down the Path to Tax Savings. Please contact us at 888-968-4094 or [email protected].