The tax and spending package signed into law July 4 unwound a complication from the 2017 Tax Cuts and Jobs Act. For tax years beginning after Dec. 31, 2024, the new law restores immediate expensing for domestic research and experimental expenditures under Section 174 of the federal tax code.
The TCJA’s forced amortization — five years for domestic research, 15 for foreign — never matched the rhythm of innovation. Now, the policy recognizes reality: Research is an upfront cost, not a deferred promise.
But the simplification ends there. States have swiftly created a fragmented map of their own, with conformity rules that veer from straightforward to downright interpretive. The federal government made Section 174 simple again; the states made it interesting.
