Tech companies in the US will get $3.5B from the tax credit

Companies that use tech-savvy staff to work on software, applications and other technologies to make them more competitive are being awarded a $3 billion tax credit that would help them to compete in the digital economy.

That’s according to a report from the National Association of Manufacturers and the National Federation of Independent Business. 

The tech industry has long benefited from the federal government’s tax incentives, which allow companies to deduct up to $2,500 in payroll tax from their employees’ wages.

Companies that employ more than 100 people get a $25,000 tax credit, while smaller companies get a tax break of $1,500. 

But the tax credits have been shrinking in recent years, as tech companies have struggled to make money.

The average tax credit for a company that employs 25 people or fewer dropped to $6,900 in 2018 from $10,400 in 2017, according to the NRM. 

Now, the tax breaks are set to rise by $2.5 billion this year, a $2 billion increase that the NRMS predicts will help the tech industry reach $15 billion in revenue by 2025. 

“The technology industry is a great example of the power of technology, and our new tech tax credit is a good first step toward making it more attractive for companies to invest in the growth of the economy,” the NRMA’s CEO said in a statement. 

With a tax credit of up to five times as much as the average, companies can use the money to invest or hire more people.

The tax credit helps companies create and grow new businesses, as well as help companies make investments in research and development. 

To be eligible for the tech tax credits, companies must have a gross profit of more than $1 billion and have fewer than 500 employees.

Companies must also be headquartered in the United States, the NRMC says.

The tech industry’s share of the US economy grew by 13.6% from 2014 to 2018, and is expected to grow by another 5.3% by 2025, according to the NRMP.


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