PATH Act of 2015 Tax Credit | Bennett Thrasher (BT) Skip to main content

On December 18th, President Obama signed into law the groundbreaking Protecting American from Tax Hikes (“PATH”) Act of 2015. Notably, this legislation dramatically improves the R&D Tax Credit. In fact, while the focus has been on Congress making the R&D Tax Credit permanent, the more substantive changes come from two new options for taxpayers to utilize the credit. To detail, below is a summary of the changes made to the R&D Tax Credit:

  • Permanently extends the R&D Tax Credit;
  • Allows for eligible small businesses ($50 million or less in gross receipts) to claim the credit against alternative minimum tax (“AMT”) for tax years beginning after December 31, 2015; and,
  • Allows eligible startup companies (those with less than $5 million in gross receipts and earning revenue for less than 5 years) to claim up to $250,000 of the credit against the company’s federal payroll tax for tax years beginning after December 31, 2015.

Accordingly, taxpayers that could not utilize or take full advantage of the R&D tax credit in the past should now reassess their eligibility to maximize this lucrative incentive. For more information and assistance, please contact Betsi Barrett or call 770.396.2200 to schedule a consultation.