‘Gross receipts’ & other items clarified for research credit — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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‘Gross receipts’ & other items clarified for research credit

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in Office Management,Payroll Management

You say you’re a small start-up company that’s eligible for the payroll tax research credit? Not so fast: The IRS has provided interim guidance on how to figure gross receipts for purposes of this credit. Even better: The IRS also says that you may claim the credit on an amended return. (Notice 2017-23, IRB 2017-16)

Gross receipts. Small start-up businesses—those with gross receipts of less than $5 million for the taxable year, and that didn’t have gross receipts for the five preceding years, ending with the current taxable year—may take the research and development tax credit against the employer’s share of the Social Security portion of FICA taxes, rather than against their income tax liability. The credit is equal to the least of these amounts:

  • An amount specified by you, up to $250,000
  • The amount of the research credit determined for the taxable year
  • For qualified small businesses other than partnerships or S corporatio...(register to read more)

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