The Payroll R&D Credit, established five years ago this past December, for the first time allowed pre-revenue innovators to take a portion of their R&D credit against their payroll tax obligation. The Credit served as a recognition from Congress that income tax credits provide no immediate benefit to pre-revenue biotechs.

Allowing these companies to offset payroll taxes with the R&D credit helps even the smallest biotechs unlock the federal R&D incentives intended to encourage ever-greater investment in U.S. research and development.  The Payroll R&D Credit acknowledged that U.S. R&D policy should support all innovators, large and small.

As we reflect on this achievement five years later, there is more work to be done to ensure the incentive goes far enough in truly supporting small pre-revenue innovators as policymakers intended.

To support BIO’s advocacy to make sure the credit works for small biotechs, we have partnered with EY on a study to analyze credit utilization among small companies. To take this important survey, please click here. Your participation in this survey will be instrumental in supporting our advocacy moving forward. Any information provided will only be viewed by EY and only reported in aggregate.

To read more about BIO’s advocacy to strengthen the Payroll R&D Credit, please click here.