PATH Act bonuses for smaller construction companies

by David M. Wolfenden, CPA, CVA, MS, Managing Director


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If yours is a smaller construction company, you may think you’re even further behind the eight ball when it comes to claiming the research tax credit. After all, large businesses can presumably allocate staff and resources to innovation more readily.

But smaller construction businesses should still give it a try — and the Protecting Americans from Tax Hikes Act gives you a couple of extra reasons to make the effort. First, eligible small companies can use the research credit to offset their alternative minimum tax liability. To qualify, your business must have earned less than $50 million in average gross receipts for the three preceding years.

In addition, newer and particularly small companies can use the research credit to offset the FICA employer portion of payroll tax. The amount of the credit that can be used to do so maxes out at $250,000 for each eligible year. To qualify here, a business must have less than $5 million in annual gross receipts and have had gross receipts for no more than five years.

We welcome the opportunity to put our construction industry expertise to work for you. To learn more about how our firm can help advance your success, please contact Dave Wolfenden at (302) 254-8240.

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