A start-up software company with an innovative technology in the education space was growing rapidly. Engineers, researchers and other professionals are joining the company monthly to grow the solutions and overall enterprise.


There is a tremendous investment being made in developing and advancing the technology. There are constant enhancements, customization, research and new product development occurring weekly. The investment being made in salaries, software and hardware are constant. The challenge is the company is reinvesting profits back into the company, and there will not be a tax liability in the near future. Traditional tax credit programs available are of little value.


Economic Incentives Advisory Group (EIAG) was able to introduce a newly revised version of the Research and Development (R&D) Tax Credit to the client. The client, commencing in 2017, is now able to claim the qualified R&D expenses and apply them towards the payroll taxes. Even companies that do not have a tax liability can benefit from this program by reducing payroll by up to 6.2%, which is the employer’s portion of payroll taxes.


Starting in 2017, the company will be able to reduce its payroll by up to $250,000 per year – for a period of up to 5 years. This will significantly reduce the client’s operations expenses and allow them to continue to invest in their company. Additionally, the client will be able to continue to dedicate personnel to core job functions, and allow EIAG to administer this program.


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© 2016 Economic Incentives Advisory Group.