A bigger R&D tax credit?

That’s the proposal in the Fostering Innovation and Research to Strengthen Tomorrow (FIRST) Act (H.R. 8253). It would double the current tax credit of 20% of increased research costs to 40% (and the alternative credit from 14% to 28%). What’s more, it would double—from $250,000 to $500,000—the amount of the credit that can be used by a small business to offset the employer portion of Social Security taxes. The definition of small business would be changed from a limit of $5 million in gross receipts in the current year to the “gross receipts test” (for 2022 this is average annual gross receipts in the 3 prior years not exceeding $27 million). If enacted, the changes would apply starting in 2023. #IdeaoftheDay