Last month, the IRS released a memorandum clarifying exactly how start-up companies can use the R&D Tax Credit to offset their payroll tax liabilities. Before the memo, there was some confusion as to whether or not start-ups needed to wait until the end of the year to apply the R&D credit against their payroll taxes. The IRS has clarified that start-up companies may apply the R&D credit to offset estimated payments. Hence, these companies are not required to wait until the end of their tax year when filing to claim the R&D credit.
In this memo, the IRS is continuing to clarify laws laid out in the Protecting Americans from Tax Hikes (PATH) Act of 2015. In March of this year, the IRS released another memo about how start-ups can determine gross receipts for the purpose of being classified as a start-up business. Start-ups can claim up to $250,000 of R&D […]