Defined term
Payroll tax offset
Also: payroll tax credit · qualified small business payroll election
Using a research credit against payroll taxes rather than only against income tax.
Some regimes allow qualifying small businesses or startups to apply a portion of an R&D credit against employer payroll taxes (for example, certain U.S. eligible small business elections under Section 41). This can deliver cash-flow benefit before income tax liability arises. Caps, election timing, and entity eligibility are tightly defined. Confirm current federal (and any state) payroll offset rules before relying on them in forecasts.
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Educational definition only. Not tax or legal advice. Confirm current program rules with official guidance and a qualified adviser.