Do I Qualify For A Tax Credit? | Leyton USA Skip to main content

Do I Qualify For A Tax Credit?

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Qualifying Expenses
  • You are able to claim on the amounts paid for:

              - Salaries
              - Supplies
              - Contract research
              - Computer leasing

  • Salaries paid to employees who conduct qualified activities, as well as to first-line managers and personnel who directly support these individuals, can qualify.
  • These salaries are generally one of the largest components in an R&D tax credit claim, but they may differ by industry. For example, the most prominent expense for pharmaceutical and construction companies is often contract research.
  • A portion of payments made to U.S. based contractors, as well as any supplies consumed in the R&D process, are also eligible.
Payroll tax
Payroll Tax Offset

The new payroll tax offset is available to companies that have:

  • Gross receipts for five years or less, under $5 million in gross receipts in the current year and for each subsequent year the payroll tax offset is elected, and qualifying research activities and expenditures.
  • Early stage businesses could potentially use the R&D credit to offset payroll taxes for up to five years, with a maximum of $1.25 million in total credits used on their quarterly federal payroll tax returns, regardless of whether they are profitable.


Documentation is Key
  • With recent changes to the legislation, documentation has become a critical element of the R&D credit initiative.
  • Leyton will work with their clients to evaluate all activities for potential eligibility, identify qualifying expenses and produce documentation to support and justify these costs.