A taxpayer that claimed the R&D payroll tax offset starting in 2016 may not qualify for tax year 2021. The election is only allowed for 5 years. Therefore, if the offset was elected in 2016 through 2020 the 5 year limitation would be met.
Section 41(h)(4)(B)(ii) of the Code provides that a person may not make a payroll tax credit election if such person (or any other person treated as a single taxpayer with such person under § 41(h)(5)(A)) has made a payroll tax credit election for 5 or more preceding taxable years.
2016 was the first year of the payroll tax offset. 2021 is the first year a taxpayer may not be eligible.
Scott F. Callahan, C.P.A. is a Tax Principal at Katz, Nannis + Solomon, P.C. If you have any questions or would like to speak with one of our tax professionals, please contact our office at 781-453-8700.