Currently, the Research and Experimentation Tax Credit cannot be applied against federal payroll taxes. However, there is current legislation on Capitol Hill that could change the current statute to allow this incentive in select cases if passed into law. For example, the House of Representatives and the Senate are considering allowing start-up companies in their first five years to take the U.S. Federal-Level Research and Experimentation Tax Credit against business/payroll taxes (i.e., with a ceiling of $250,000 per year). I will continue to provide legislative updates from the Hill as they become publicly available.

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