01 |
RESTORES FULL EXPENSING, ADDS AMORTIZATION OPTIONS |
02 |
PROVIDES RETROACTIVE RELIEF |
In recent years, many businesses investing in R & D |
For expenses incurred during tax years 2022 – 2024, |
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have struggled with the burden of amortizing costs |
larger taxpayers can choose to accelerate and |
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over a five-year period— a provision of the Tax |
deduct unamortized domestic R & D costs in 2025, |
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Cuts and Jobs Act. Beginning in 2025, the OBBBA |
or deduct them ratably over 2025 and 2026. |
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restores full expensing, meaning companies can |
Smaller businesses( revenues less than $ 31 million |
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once again deduct domestic R & D costs in the year |
based on average annual gross receipts for tax |
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incurred( foreign investment remains unchanged |
years 2022 – 2024) have an unprecedented |
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at a 15-year amortization requirement). For those |
opportunity to amend returns for those years, |
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investing in domestic R & D, that can put significant |
opening up the potential for significant refunds |
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dollars back into the business in the near term. |
for costs capitalized under the old tax bill. |
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Returns must be amended by July 4, 2026, to |
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take advantage of these retroactive benefits. |