The Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) significantly enhanced the Federal-Level R&D Tax Credit Program (hereinafter “RTC Program”) under I.R.C. § 41 on a myriad of levels for both eligible “Small Businesses” and “Start-Up Companies”. More specifically, the enhanced RTC Program has been considerably restructured for these aforementioned eligible companies to now:
- Allow eligible “Small Businesses” (i.e., $50 million or less in gross receipts) to claim the credit against the Alternative Minimum Tax (hereinafter “AMT”) for tax years beginning after December 31, 2015; and
- Allow eligible “Start-Up Companies” (i.e., those with less than $5 million in gross receipts and earning revenue for less than 5 years) to claim up to $250,000 of the credit against the company’s federal payroll tax for tax years beginning after December 31, 2015.
These aforesaid statutory changes to the RTC Program truly represent a paradigm shift for eligible small businesses and start-up companies alike to not only claim the R&D Tax Credit but most importantly to be able to actually utilize the tax benefits associated with this highly advantageous RTC Program.
Please contact me for a complimentary consultation to discuss the scope and application of the newly enhanced RTC Program and to determine the optimal methodology to properly identify, gather and document a sustainable R&D Tax Credit claim on a contemporaneous basis for your eligible Small Business and/or eligible start-up company.
A copy of the PATH Act can be downloaded here for your reference.
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