Federal R&D Tax Credit Startup Payroll Offset

Program Summary & Scope

Qualified early-stage startups can apply Section 41 research tax credits against their federal payroll tax liabilities. Under the Inflation Reduction Act, eligible startups can offset up to $500,000 annually for up to 5 taxable years.

Key Requirements & Eligibility Criteria

• Must have gross receipts of under $5M in the tax credit election year
• Must have no gross receipts for any taxable year preceding the 5-taxable-year period
• Applies directly against FICA social security and Medicare employer taxes