Beginning in 2016, qualified small businesses can elect to take all or a portion of their R&D credit against their employer FICA liability (6.2%). This is particularly useful for start-up businesses without federal tax liability and results in a more immediate cash-boost to the company’s bottom-line.

Eligible startup companies are defined as those in business 5 years or less and with less than $5 million in gross receipts for the claim year. The payroll tax credit is can offset up to $250,000 annually, for up to five years.

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