Startup Tax Credit

There is a new tax credit (up to $250K per year & $1.25M total per company) which allows 2016 R&D expenses to generate a tax credit to be used against 2017 payroll taxes.


  • 2016 qualifying expenditures include wages and costs related directly to software development
  • For each dollar of qualified expenditures, your company receives a payroll tax savings of up to 7 cents in the next year for federal payroll taxes, and depending upon the state, may also save in state income taxes
  • If you had a net loss and didn’t owe taxes in 2016 you can still get a tax benefit for future years
  • Note: your company must have had zero revenue prior to 2012 and no more than $5 million in gross receipts in 2016 to use this credit

For more information please contact or your tax advisor.