Instructions for IRS Form 8974 Qualified Small Business Payroll Tax Credit for Increasing Research Activities

IRS Form 8974 Qualified Small Business Payroll Tax Credit for Increasing Research Activities

This document contains official instructions for IRS Form 8974 , Qualified Small Business Payroll Tax Credit for Increasing Research Activities - a tax form released and collected by the Internal Revenue Service (IRS), a subdivision of the U.S. Department of the Treasury. An up-to-date fillable IRS Form 8974 is available for download through this link.

FAQ

Q: What is IRS Form 8974?
A: IRS Form 8974 is a form used to claim the Qualified Small Business Payroll Tax Credit for Increasing Research Activities.

Q: What is the purpose of Form 8974?
A: The purpose of Form 8974 is to calculate and claim the payroll tax credit for qualified small businesses that have increasing research activities.

Q: Who is eligible to use Form 8974?
A: Eligible taxpayers include qualified small businesses with gross receipts of less than $5 million in the current taxable year and no more than five prior taxable years.

Q: What is the Qualified Small Business Payroll Tax Credit for Increasing Research Activities?
A: It is a tax credit that allows eligible small businesses to offset a portion of their employer Social Security tax liability.

Q: How is the credit calculated?
A: The credit is calculated based on a percentage of the qualified research expenses incurred by the small business.

Q: When is Form 8974 due?
A: Form 8974 is generally due on the same date as the employer's quarterly payroll tax return, which is the last day of the month following the end of the quarter.

Q: Can Form 8974 be filed electronically?
A: No, Form 8974 can only be filed on paper and cannot be e-filed.

Q: Are there any additional requirements or documentation needed to claim the credit?
A: Yes, taxpayers must also file Form 6765, Credit for Increasing Research Activities, to claim the credit.