Your eligibility to claim R&D Tax Credit
Due to the underutilization of R&D tax credit, taxpayers of startup companies that develop or improve products should be aware that they are eligible to claim a tax benefit.
To do so, taxpayers should analyze their situation per open tax year and adhere to the guidelines of relevant legislations before retaining unclaimed credits.
The Protecting Americans From Tax Hikes Act of 2015 P.L. 114-113 and Tax Credit allows taxpayers to claim up to $250,000 of the credit with respect to the employer’s FICA portion of the payroll tax, and Job Acts P.L. 115-97 reduces the corporate tax rate and repeals the corporate alternative minimum tax.
Since credit and deduction cannot occur for the same research expenditure, taxpayers must take a reduced R&D tax credit if they wish to retain their full deduction for research expenses.
Under Sec. 280C(c)(3), the new tax benefit of 21.54% will allow taxpayers to keep more of their credit this year.