A tax credit for work you’ve already done
Companies claim billions in R&D tax credits each year, but most still go to large corporations. Now startups and SMBs can take advantage of America’s biggest tax incentive.
The federal R&D tax credit was originally established in the early 1980’s to stimulate growth in the US economy. Recent legislation has changed the game, broadening access to this significant benefit.
Prior to 2016, 87% of credits were claimed by companies >$100MM in revenue.
The financial opportunity is significant, and amounted to nearly $15B in credits in 2016 alone.
Originally established by ERTA in 1981, the PATH Act signed in December 2015 finally made the credit permanent.
Qualified small businesses can now reduce payroll taxes with the R&D credit, up to $250k per year.
Certain businesses subject to AMT can now benefit from the R&D tax credit.
Companies have access to a new form of non-dilutive capital that never existed before
Fuel your growth by continuing to invest in technology-based innovation.
New ways to monetize
Claim against AMT or offset payroll taxes up to $250k per year
Simpler qualification for software projects
Here to stay
Permanently enacted into legislation with bi-partisan support
A tax savings scenario
A tech startup based in San Francisco raises $4M to develop smart dental technology & insurance products. In 2020, $1.16M of this capital is spent on qualified innovation activities as follows:
Do you qualify?
Are you creating or improving a product, process, formula, or software?
Do you incur expenses for wages, contractors, or supplies related to this work?
Computer science based product/service development
Discovery and design of new materials, particularly solids
Agriculture, food production, medicine
Mobile, manufacturing, and medical
Innovative or novel materials development
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