The regular R&D credit reduces income tax. A pre-revenue startup does not owe income tax, so on its own the credit would just sit there as a carryforward. Congress fixed that with the payroll tax offset, so young companies can turn the credit into cash now instead of waiting until they are profitable.
The payroll election is open to a qualified small business, which generally means two things are true:
The payroll offset does not lower the bar for qualifying. Your work still has to pass the four-part test, and you still need the documentation to back it up. The election also has timing rules, so it generally has to be made on a timely-filed return. The upside is cash flow, not extra credit, so treat it as a way to use what you earned sooner.
No. That is the whole point of the payroll offset. It is built for companies that owe little or no income tax and would otherwise have to carry the credit forward.
Generally you cannot have gross receipts dating back more than five years. Once you have receipts older than that window, you no longer meet the qualified-small-business test for the payroll offset.
The employer share of Social Security first, then the employer Medicare share. It does not touch the amounts withheld from employee paychecks.
Then you may be better off using the credit against income tax. The payroll offset is the path for companies that cannot use the credit against income tax in the first place.
This guide is general information, not tax advice. Your situation has its own facts, so talk to a credentialed professional before you act on anything here.