How does half a million dollars sound? No lottery ticket or luck required.
Starting Jan. 1, 2023, the Research and Development (R&D) tax credit will double from $250,000 to $500,000.
That means eligible small businesses who engage in qualified R&D activities can claim up to half a million dollars toward their payroll tax liability and other business expenses.
And you don’t have to wear a lab coat or bubble beakers on hot plates to benefit from the credit. As a software developer who produces solutions for your clients, you could be eligible. Check out IRS guidance for more information on what type of companies and activities qualify for the credit.
Wait, back up. What’s the R&D tax credit?
Not familiar with the R&D tax credit? No problem.
Here’s a basic definition: Originally created in 1981, the federal research and development tax credit is a federal incentive that offers qualifying businesses dollar-for-dollar tax savings that reduce a company’s tax liability.
Per The White House, starting in 2023, small businesses will be able to use the credit to reduce payroll taxes and several other business expenses by up to $500,000 annually. The White House states that the credit increase is designed to help all manner of small businesses “solve global problems and create jobs to propel our economy forward.”
2023 could be the year you make your own luck — no scratch-off or ante-up required.
Whether you’re just starting out or have been in business for a few years, consider consulting your accountant or tax advisor about claiming the R&D tax credit for up to a half-million dollar boost. You can learn more about the credit by visiting the IRS website as well.
If you’re looking for more ways to grow your business’ revenue this year and beyond, Global Payments Integrated can help. Reach out anytime to learn more about the solutions, resources and support you’ll get access to when you choose to partner with us.
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