Clarification of Treasury Notice 2017-23 and the Payroll Tax Credit

Clarification of Treasury Notice 2017-23 and the Payroll Tax Credit

Posted by Jeffrey M. Feingold on 11.29.17

In 2017 the Treasury and the IRS released Notice 2017-23 providing interim guidance related to the payroll tax credit for research expenditures by qualified small businesses under Code § 3111(f).  The notice provides interim guidance on the time and manner of making the payroll tax credit election, claiming the credit, and on the definitions of “qualified small business” and “gross receipts.” 

Treasury Notice 2017-23 clarifies that if a qualified small business files its return for a taxable year beginning after Dec. 31, 2015, but fails to make the payroll tax credit election, it may make the election on an amended return filed on or before December 31, 2017. 

To qualify for this extension, the taxpayer must either:

1. Indicate on the top of Form 6765 (Credit for Increasing Research Activities) that the form is filed pursuant to Notice 2017-23.

2. Attach a statement to Form 6765 reflecting the payroll tax credit election that the form is filed pursuant to Notice 2017-23.   

For more information contact Tax Point Advisors at (800) 260-4138 or please leave a message below. You may also visit: https://www.irs.gov/pub/irs-drop/n-17-23.pdf


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