How can your small business use its R&D tax credit if you do not owe an income tax this year?

There could be many reasons why your business may not owe income tax in a given tax year. But you are certain your business conducts research and development (R&D), has expenses related to R&D, and would like to claim the R&D tax credit. What options do you have? While it is true you mainly use the R&D tax credit to offset income taxes, dollar for dollar, recent changes to the tax law, specifically the PATH Act, now allows qualified small businesses to apply up to $250,000 of their R&D tax credit against payroll taxes. A qualified small business (QSB) has: Keep in mind, you must have payroll (i.e. W2, full-time employees) to owe payroll taxes. In addition, as a QSB, … Read More