The Startup & Innovation Act can be utilized in two different ways:

  1. Against AMT
  • Effective for tax years beginning after December 31, 2015
  • Taxpayers may be able to utilize the credit against 2015 tax liability due to one-year carry back provision of IRC ยง 39
  • The provisions related to use of the credit against payroll tax liability apply for tax years beginning after December 31, 2015, the earliest calendar quarter for companies to utilize the credit will be Q2 of 2017

  1. Against Payroll Tax
  • Credit can be utilized against FICA the first calendar quarter which begins after the date the taxpayer files the return & Election
  • If the credit exceeds the tax imposed for any quarter, unused credit can be carried forward to succeeding calendar quarter