Senior-Focused Tech Startups Can Load Savings with R&D Tax Credits

Written by Corporate Tax Incentives. Updated Jan 5, 2024.

RD_AssistedLivingWhat's the trend entering 2024? 

For many, it will be the continuation of technological innovations and upgrades to grow their respective industries. However, which industries are benefiting? On the whole, senior living operators are continuing to spend on technology and plan to further do so this year. The large majority of respondents to this survey plan to increase their tech budgets significantly in 2024.

While investing time and money into the increase in technology, the introduction of the Research & Development (R&D) tax credit may become essential to companies developing and creating new or updated technology for senior living operators.

Booming Boomers

The older generation numbers will spike in 2030 when all Baby Boomers will surpass age 65.1 The estimated senior population just in Boston is expected to double within that time frame to hit 130,000.2  More mature and elderly people in the world means market growth potential for services.

According to Business Insider, the homecare market alone could soar to $225 billion by 2025 – a $125 billion jump from 2016.

So exactly how are tech startups aiding the elderly?

Re-Tech Your Elders

One company has partnered with healthcare providers to help seniors navigate their Medicare plans and deliver technical assistance.

Another has enhanced medical alert devices with a waterproof product that doesn’t require charging and will send preemptive alerts when the device detects concerning behavior from the user.

And now hearing aids are getting  challenged from a business that has developed wireless headphones that grant assisted living residents targeted, more sound-specific hearing, with less background interference.

Then we have a company that has looked beyond the elderly's more obvious needs and right into a virtual world. This company hopes to expand seniors' often limited mobility with virtual reality excursions, to places they’ve never been and old haunts they’d like to visit again.

Other startups are focused on helping those who help seniors, such as creating mobile platforms for senior-care training and digital apps that provide real-time, on-demand healthcare staff scheduling.

Learn More about Decreasing Small Business Tax Liability with the R&D Tax Credit


Rendering Revenue

Even though the market is ripe and bountiful, investors appear to question the potential. In lieu of external funding, these startups can look to the federal research and development (R&D) tax credit for help.

This incentive loads businesses with a dollar-for-dollar reduction in federal tax liability for eligible research and development activities related to developing or improving products, process, techniques, formulas, and software. Particularly for tech and software companies, the tax credit offers excellent potential.

To promote innovation within small businesses and specifically start-up companies, Congress created a provision within the Protecting Americans from Tax Hikes (PATH) Act of 2015 that incentivized and allowed qualified small businesses (QSBs) to benefit from R&D efforts even if they were not yet profitable, and thus not generating income tax liability.

For any taxable year beginning after December 31, 2022, the IRA’s provision increases the credit allowance from $250,000 up to $500,000 to apply toward payroll tax liability. However, it is important to note that while the first $250,000 can be applied to Social Security payroll tax liability per the original PATH Act provision, the additional $250,000 can only be applied against Medicare payroll tax liability. This increase in R&D tax credit allowance is an opportunity for small businesses to focus on further research as they gear up business.

Tax Credits to Jump Start Your Start Up

Technology hasn’t left our aging population behind. The industry is leveraging its potential to help seniors make the most of their biggest birthdays. R&D tax credits can load tech startups that develop new or updated technologies with significant savings to help their companies soar to new heights.

For maximum tax savings, startups should partner with a tax professional who can help them process the details and troubleshoot errors that may arise.


What Can R&D Do For You?  Discover a practical approach to maximizing your federal research and  development tax credit. Download Guide

  1. Population Projections, United States Census, 2017
  2. Guide: Seven Elder Care Startups Preparing for an Aging Population, Bostinno, 2018

Topics: R&D Tax Credit, Federal

Corporate Tax Incentives

Written by Corporate Tax Incentives

CTI is a tax incentives specialty firm that secures greater tax credits for businesses with our proven project methodology and unparalleled personalized service. For almost 20 years, our elite tax professionals have proactively engaged clients to deliver unmatched value with transparency and efficiency thorough secure in-house software, comprehensive audit-ready deliverables, and 24x7 access to real-time dashboards. We are tax consultancy experts passionate about maximizing credits and incentives for powering the success of your business.