Is Your Business Taking Advantage of the Research & Development Credit?

By Emily Taibl | Jan 25, 2017

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Front view of a man arranging wooden blocks with hand drawn yellow lightbulb in a random structure. Conceptual of research, education and innovation.

by Michael J. Holmes, CPA 

Small businesses and startups may be able to save on payroll taxes with the Research & Development (R &D) credit. In 2015 The PATH Act permanently extended the R&D credit. Starting in 2016 it got a highly beneficial addition where a taxpayer can claim the credit against their 941 taxes (payroll taxes).

If your company invests in Research and Development, has gross receipts of less than $5M, has not been in a trade or business for more than five years, and engage in qualifying research activities and expenditures, then you may qualify for the application of the credit- and get a healthy savings on your payroll taxes.

The credit can only be applied to your 941 filing after it has been claimed on a timely filed return, so acting quickly is important!

The R&D credit is always subject to scrutiny from the IRS, so it’s important to have everything properly accounted for and documented when filing.

For more information or help determining if you qualify please contact Michael J. Holmes, CPA at Sweeney Conrad, P.S. at 425.629.1990 or