Small-business tax credits can be powerful because they can directly reduce your tax bill on a dollar-for-dollar basis.
Research & Development
R&D tax credits are important for businesses to provide significant relief on the costs associated with R&D activities. This can free up funds that can be reinvested into the business or reduce the taxable income.
The R&D tax credit can also encourage businesses to undertake more R&D activities, claiming a proportion of their expenditure back and offset payroll taxes. This can lead to greater innovation and improved products and services for consumers and give eligible small businesses and startup companies a chance to maximize federal credit.
The Employee Retention Credit (ERC) is a payroll tax refund from the United States Treasury Department applicable to businesses that kept employees on payroll during the pandemic.