The Research and Development Tax Credit for Small Businesses in 2026

Episode 79 of The Tax Strategy Podcast with Fexingo digs into the Research and Development Tax Credit (R&D Credit) — a tax break often thought of as a perk for tech giants like Apple and pharmaceutical companies, but increasingly available to small and medium-sized businesses. Lucas and Luna explain how the 2026 landscape has shifted after the Tax Cuts and Jobs Act sunset restored immediate expensing for R&D costs, and how the credit can be applied against payroll taxes for startups. They walk through the key distinctions between the regular credit and the alternative simplified credit, the importance of qualified research expenses, and the four-part test for what counts as R&D under IRS rules. Specific examples include a Seattle-based robotics startup that saved $47,000 in payroll taxes in 2025, and a small manufacturer in Ohio that used the credit to offset equipment purchases under Section 179. The episode also touches on documentation traps and the recent IRS audit focus on small-claim credit filings. A must-listen for any business owner or founder investing in product development. #RDTCredit #ResearchAndDevelopment #TaxCredit #SmallBusiness #StartupTax #PayrollTax #IRS #Section174 #TaxCutsAndJobsAct #QualifiedResearchExpenses #AlternativeSimplifiedCredit #Robotics #Manufacturing #BusinessPodcast #Finance #TaxStrategy #FexingoBusiness #TaxPlanning Keep every episode free: buymeacoffee.com/fexingo