The IRS has released draft instructions for Form 941-X (Adjusted Employers Quarterly Federal Tax Return or Claim for Refund). The revised instructions, which are crucial to know during tax season, contain a number of changes to the qualified small business payroll tax credit for increasing research activities for tax year 2023 and beyond. Previously, qualified small businesses in West Palm Beach FL or outside could claim up to $250,000 of the credit for research activities as a credit against payroll taxes. Beginning in 2023, the Inflation Reduction Act of 2022 increases that up to $500,000. The credit may be used to first reduce the employer share of social security tax up to $250,000 per quarter, and the remaining $250,000 against the employer share of Medicare tax. Any amount not used may be carried forward to the next quarter or if you need further clarification, may be consulted from professionals providing accounting services. The updated draft instructions can be found at www.irs.gov/pub/irs-dft/i941x–dft.pdf.
Source: PREVIEW ISSUE – No. 2023-10, PPC, Five-Minute Tax Briefing ®, May 23, 2023 | No. 2023-10
Item for Tuesday, May 9, 2023
