To strengthen an economy’s competitiveness, many industrial countries support their firms’ R&D activities. The types of support are either a project-based direct subsidization or an R&D tax incentive scheme. While many economies conduct both types of public R&D support, the German research policy solely relies on direct project-based subsidization. According to the report on the High-Tech-Strategy published in April 2017, the German Government considers the implementation of an R&D tax incentive scheme as well.With respect to the design of this instrument, the amount of the tax rate, the definition of the types of R&D activities eligible for tax support, the amount of eligible R&D expenditures and the definition of firms eligible for tax support are important adjustment factors. The definition of the eligible firms refers to the question whether all firms should be eligible for R&D tax support or whether it should depend on firm size. In the current political debate, particularly small and medium-sized enterprises (SMEs) should be eligible. The aim of this short study is to work out arguments both for and against narrowing the definition of the target group of eligible firms. Furthermore, additional costs (the reduction of tax revenue) contingent on different cut-off points of benefitting firms are calculated. These costs are calculated based on alternative assumptions of the other design elements.