Congress should allow investors in small research companies that have net operating losses to declare the portion that was associated with qualifying research activity.

To Do: Allow Investors in Small Research Companies to Use Net Operating Losses

Congress should expand the refundable R&D credit to allow pre-profit start-ups to cover payroll taxes.

To Do: Expand the R&D Credit for Pre-Profit Start-Ups

The net result of this legislation would be to increase support for research by start-ups without breaking the link between the credit and actual taxes paid. This should significantly bolster the U.S. innovation ecosystem.

ITIF Supports Legislation to Boost the R&D Tax Credit for Start-Ups

Congress should direct NSF to establish stronger university entrepreneurship metrics and use them to provide stronger incentives for commercializing research.

To Do: Direct NSF to Establish Stronger University Entrepreneurship Metrics

The tax law allowing firms to fully expense their research and development (R&D) costs expired at the end of 2021, and full expensing of equipment costs will begin phasing out in 2023. This decreases firms’ incentive to invest in these key drivers of economic growth and competitiveness. Congress should restore and make permanent full expensing for these investments.

Why Congress Should Restore Full Expensing for Investments in Equipment and Research and Development

Although it contains many positive proposals, the Tax Reform Act of 2014 would reduce the effectiveness of R&D tax incentives.

Why The Tax Reform Act of 2014 Should Expand, Not Cut, The R&D Tax Credit

Two new tax proposals promise to help small, research-intensive companies attract investors even when they are still far from profitability.

Tax Proposals Attempt to Bridge the “Valley of Death” for Small Research Firms

Tax Proposals Attempt to Bridge the "Valley of Death" for Small Research Firms

The study should build support for efforts like the bipartisan FORWARD Act recently introduced by Sens. Chris Coons (D-DE) and Pat Roberts (R-KS).

New Evidence That the R&D Tax Credit Promotes Research, Especially in Small Companies

Republicans are neglecting those aspects of tax reform that are most closely linked to the investment and innovation that promotes growth – including the research and development tax credit.

To Do: Allow Small Research Companies to Carry Forward Net Operating Losses

Recommendation

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Editors’ Recommendations

How Technology-Based Start-Ups Support U.S. Economic Growth

Related

To Do: Allow Investors in Small Research Companies to Use Net Operating Losses

To Do: Expand the R&D Credit for Pre-Profit Start-Ups

ITIF Supports Legislation to Boost the R&D Tax Credit for Start-Ups