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R&D Tax Credit — Qualified Small Business Payroll Offset (Section 41)

R&D Tax Credit — QSB Payroll Offset (Section 41) — TY2025 / Filed

Supports United States small businesses through payroll tax offsets when they fund qualifying innovation activity.

OpenInternal Revenue ServiceUnited States
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About

The Section 41 R&D Tax Credit payroll offset allows Qualified Small Businesses (QSBs) to redirect their research credit against employer payroll taxes rather than income taxes — a critical distinction for early-stage companies that have no federal income tax liability. A QSB is defined as a company with gross receipts under $5 million for tax year 2025 that had no gross receipts in any year before…

What this grant funds

Federal payroll tax offset for qualified small businesses conducting U.S.-based research and development activities, claimed against employer FICA via Form 6765.

Key facts
CycleiHow often this grant runs — e.g. annually, on a rolling basis, or a one-off call.Annual
Next deadlineiThe next date applications are due. Rolling means you can apply any time.15 Oct 2026
Decision timeiTypical time from the deadline to the funder's decision.—
Project durationiHow long the funded work is expected to run.—
Award typeiThe form of funding — grant, equity, loan, tax credit, etc.Tax credit
Match fundingiThe share of project costs you must cover yourself. 0% = fully funded.0%
Funding pooliThe total budget available across all awards in this round.—
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Industries

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Eligibility criteria

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Timeline

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Last verified: 22 Jul 2026Source: www.irs.gov