A new bipartisan bill introduced in Congress – the Startup Innovation Act of 2013 – promises a big benefit to entrepreneurs via a new research and development tax credit.
The bill, which was originally introduced last summer, was reintroduced in the Senate in late January. A House bill that would mirror the Senate bill is expected to be introduced shortly.
If passed, the new law would allow companies that are less than five years old and have less than $5 million in total revenue to claim a research and development tax credit of up to $250,000 against their employment taxes.
It is typical for firms to deduct R&D expenses from taxable profits, but under the new law, if a company has not yet made a profit, it can deduct its R&D expenses from employment spending.
Legislators said that it has been the larger companies that have benefitted in the past from R&D tax credits; the new legislation is aimed at incentivizing entrepreneurs to invest in innovation.
Coupled with the changes to benefit startups and small businesses provided by the JOBS Act, this new bill offers a jumpstart to entrepreneurs considering the formation of new companies across the country.
To determine how you might benefit from new legislation aimed at helping small businesses, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.