The One, Big, Beautiful Bill (OBBB) included a significant change to domestic research and experimental (R&E) expenditures under Section 174. In recent years, taxpayers were required to capitalize and amortize R&E expenditures. Now, the OBBB provides the option to return to deducting domestic R&E expenditures in the year paid or incurred. Importantly, transition rules have also been included that provide options for deducting previously capitalized and unamortized amounts.
During this webinar, our Section 174 specialists will discuss how the new law implements this important change for businesses that incur R&E expenditures, the ripple effects of this change on other tax provisions, why domestic R&E expenditures are still important for most businesses to track, the impact of state nonconformity, and suggestions for actions that businesses may consider taking over the coming months.
Learning objectives:
- Understand how the OBBB changed domestic R&E expenditures under IRC Section 174.
- Evaluate the transition rules offering three deduction options to release domestic R&E expenses that were capitalized during tax years 2022, 2023, and 2024.
- Understand the impact of state nonconformity with the OBBB’s Section 174 transition rules.
- Explore how this change could affect other tax provisions.
