Early equity planning can lower the tax you pay at exit.
QSBS, 83(b) elections, and R&D credits can lower the tax founders, early employees, and startups pay, and are easiest to get right early. Summer Associates models the federal and Connecticut tax on the exercise and sale scenarios you choose, before you act.
Or call (203) 327-4311 to talk with our Stamford office.
Enrolled agents
Our practitioners are enrolled to practice before the Internal Revenue Service.
Federal and Connecticut
We model federal and Connecticut tax together, so you see the state effect of a federal move before you make it.
Local to Fairfield County
Based in Stamford and serving clients for over 35 years.
Planning, not just filing
We focus on the decisions you can still change: elections, timing, and year-end moves.
Where founders can lower their tax, from formation to exit
Much of a founder's tax at exit is set at formation and the first equity grants.
Qualify for QSBS from day one
Exclude up to $15M or 10x basis of gain from federal tax on C corporation stock held 5+ years, with partial exclusions at 3 and 4 years.
How it works →EquityFile the 83(b) election within 30 days
Pay tax on near-zero value now instead of ordinary income on every vest.
How it works →R&DExpense domestic R&E under §174A
Domestic research costs are deductible again, and prior capitalized costs can be accelerated.
How it works →R&DApply the R&D credit against payroll tax
Early-stage startups can use up to $500,000 a year of R&D credit against employer payroll taxes.
How it works →OptionsPlan ISO exercises around AMT
Exercise ISOs in amounts that stay under the AMT crossover, and start the holding period early.
How it works →ExitMultiply QSBS with gifting and trusts
Each taxpayer has a separate exclusion cap, so gifts to children or non-grantor trusts can multiply it. Gifts to a spouse generally can't.
How it works →In-depth guides
Plain-English explainers covering the rules, the numbers, and the common mistakes.
QSBS after the 2025 changes: the founder's guide to Section 1202
How the expanded QSBS rules work for stock issued after July 4, 2025: the $15M or 10x cap, $75M asset test, partial exclusions at 3 and 4 years, and stacking.
Read the guide · 9 min →Connecticut taxes for startups and founders: R&D credits, the angel credit, QSBS, AMT and the New York commute
Connecticut tax for startups and founders: R&D credits and the 65% cash exchange, the angel investor credit, QSBS, AMT, and New York commuter rules.
EquityThe 83(b) election: the 30-day decision every founder must get right
What an 83(b) election does, why founders almost always file it, how to file within 30 days, and when it doesn't make sense.
R&DR&E expensing under §174A and the R&D payroll tax credit
The restored domestic research deduction, options for unamortized 2022–2024 costs, and how startups apply up to $500,000 of R&D credit to payroll tax.
How working with Summer Associates starts
The first consultation is free, with no obligation. From the first call to a plan, the process has three steps.
Start with a conversation
Call (203) 327-4311 or send us a note. Tell us what you are working on and what you want to solve.
We review the details
We look at your cap table position, option grants, R&D spending, and last return to see which strategies fit and what they could be worth.
You get a plan
We model the options on your numbers, federal and Connecticut, and set out the steps and the deadlines that apply.
Summer Associates Tax Services, 48 Union St, #1C, Stamford, CT 06906. Convenient to clients throughout Fairfield County, including Greenwich, Darien, New Canaan, Norwalk, Westport, and Fairfield.
Book a free consultationThe 2026 numbers that matter
The federal and Connecticut figures founders and early employees use when planning equity grants, option exercises, and an exit.
| Item | 2026 figure | Notes & source |
|---|---|---|
| QSBS gain exclusion cap | $15M or 10x basis | Whichever is greater, for stock issued after July 4, 2025 (Crowell) |
| QSBS gross assets limit | $75M | Applies to stock issued after July 4, 2025, versus $50M for earlier stock, and is tested before and immediately after issuance |
| QSBS holding periods | 3 / 4 / 5 years | 50% / 75% / 100% exclusion for new stock |
| 83(b) election deadline | 30 days | From the date restricted stock is transferred, or issued, to you |
| R&D credit payroll offset | Up to $500,000 | For qualified small businesses (IRS Form 6765 instructions) |
| 2026 AMT exemption, single / joint | $90,100 / $140,200 | Phase-out begins at $500,000 / $1,000,000 |
| Connecticut R&D credit exchange | 65% (90% biotech) | Cash refund of a small company's unused current-year CT R&D credits, up to $1.5M a year (Source) |
| Connecticut angel investor credit | 25% | Of a $25,000+ investment in an approved CT business. FY2027 credits are fully reserved, and the program reopens July 1, 2027 (Source) |
Common questions
What changed with QSBS in 2025?
For stock issued after July 4, 2025, the per-issuer cap rose to the greater of $15 million or 10 times basis, the gross assets limit rose to $75 million, and partial exclusions of 50% at three years and 75% at four years were added, with 100% at five years. These are federal rules. California doesn't follow the QSBS exclusion, and several other states limit or deny it, so state tax may still apply.
What happens if I miss the 83(b) deadline?
The 30-day deadline is strict. If you miss it, each tranche of stock is taxed as ordinary income when it vests, based on the value then. Sometimes a company can cancel and reissue the grant, but that restarts the holding period.
Can a startup deduct R&D costs immediately again?
Yes. §174A, added in 2025, allows domestic research and experimental costs to be deducted currently starting in 2025. Small businesses could also elect to apply it retroactively to 2022–2024, though that election window closed by July 6, 2026.
Will exercising ISOs trigger AMT?
It can. The spread between the exercise price and fair market value is an AMT adjustment. For 2026, the AMT exemption is $90,100 single and $140,200 joint, phasing out at 50 cents per dollar above $500,000 and $1,000,000.
Does Connecticut tax QSBS gain?
Not if the gain is excluded federally. Connecticut income tax starts from federal adjusted gross income and has no add-back for gain excluded under Section 1202, so that gain is excluded for Connecticut too. Gain that isn't excluded, such as the 50% that remains taxable on a three-year sale, is taxed at Connecticut's regular rates of up to 6.99%.
Can a Connecticut startup get cash for unused R&D credits?
Yes. A C corporation with prior-year gross income of $70 million or less can exchange its current-year Connecticut R&D credits for a refund of 65% of their value, or 90% for small biotech companies, up to $1.5 million a year. To qualify, it must have no Connecticut corporation tax liability beyond the $250 minimum or, in a year with no net income, the capital base tax. It applies on Form CT-1120 XCH with a timely filed return. From 2026, partnerships and S corporations have a separate 6% R&D credit with the same 65% and 90% exchange.
See the tax on your equity choices before you make them.
In a consultation, we look at your cap table position, option grants, and last return, estimate the federal and Connecticut tax on the exercise or sale scenarios you choose, and tell you whether your shares may qualify for QSBS.