R&D Tax Credits: Benefits for startups and small businesses

Legislation expanding the potential R&D benefit for startups and small companies enables them to offset up to $250,000 of their payroll taxes annually. Using R&D credits, that is up to $1,250,000 over a five-year period.
The federal R&D tax credit benefits large and small companies in virtually every industry—even if they’re not paying federal income tax—by using it to offset a portion of their FICA payroll tax if they have:
  • Gross receipts of less than $5 million in the current tax year;
  • No gross receipts before the four prior tax years; and
  • Expenses related to the development or improvement of any product, process, or software.                                        

What should companies do?

Any businesses that meet the three criteria above should contact our experienced team to determine whether they can take advantage of the federal R&D tax credit and the payroll offset. Businesses should also consider the financial statement accounting impact

BDO offers a simple, complimentary review that provides businesses information needed to make an informed decision about whether and how to pursue R&D tax credits generally, and the payroll offset in particular.

Our team has identified more than $3 billion in R&D benefits, 95% of which have been used by thousands of companies even after examination by tax authorities.

The time to pursue these credits is now. Learn more:


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Patrick Wallace
R&D Atlantic & Southeast Leader
404-979-7107 | Email

Chad Paul
R&D Central Leader
414-272-5906 | Email
David Wong
R&D West & Southwest Leader
310-557-8254 | Email

Chris Bard
R&D National Leader
310-557-7525 | Email



Are you getting the full benefit of the R&D Tax Credit? ​►