On January 31, 2013, United States Senator Christopher Coons (D) introduced bill S. 193, which would amend Sections 41 and 3111 of the Internal Revenue Code of 1986 to allow startup businesses to use a portion of the credit for increasing research activities to offset payroll taxes. Under the proposed bill, a startup business is defined as a corporation, partnership or S corporation that has less than $5,000,000 in gross receipts for the current taxable year, and does not have gross receipts for any of the five preceding years. If the entity qualifies as a startup business, then such entity will be able to offset up to $250,000 of its payroll tax liability. The proposed bill would apply to taxable years beginning after December 31, 2012.

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