Startup Innovation Credit Act of 2013 Emerges in Congress
While lawmakers may not agree on what to do about the U.S. economy, CFOs and other senior executives agree that job creation is a good place to start. In an effort to help stimulate this growth, a bipartisan proposal was recently introduced that would make the successful Research and Development (R&D) tax credit available for the first time to innovative startup companies.
The Startup Innovation Credit Act of 2013 (SICA) was first introduced in Congress this past January in response to research that proved most new jobs in the United States are created by startup companies. However, those startups are unable to receive the R&D tax credit because they don’t have enough profit to generate an income tax liability.
Under SICA, new companies would be allowed to claim the R&D credit against all business taxes, including payroll taxes paid on each employee to fund social security and Medicare. The tax savings would help struggling startups better meet payroll needs, expand business and hire new workers. Essentially, SICA will give startups the ability to grow and inevitably help stimulate the U.S. economy.
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