Posted by Hannah Feingold on 07.01.25
July 1, 2025 - A major tax bill restoring full R&D expensing has been approved by the Senate. Trump's "One Big Beautiful Bill Act" has been narrowly approved by the Senate in a 51 to 50 vote. The Bill now goes back to the House for reconciliation with the Senate version.
The goal of key lawmakers is to have the Bill reach the President’s desk by July 4.
The Bill restores 100% expensing of R&D costs in the year incurred, thereby “fixing” the Section 174 requirement to amortize the expenses over five years. Crucially important is a provision in the Bill to allow for full expensing of R&D costs in the year incurred retroactive to 2022, for companies with average gross receipts under $31m.
PLANNING TIPS
Here's what you can do to prepare:
- Review R&D expenses in 2022 through 2024
- Model the tax impact of amending 2022-2024 returns with 100% of R&D costs expensed in year incurred
- Model the same years with R&D tax credits
HELP IS A CALL AWAY
Need assistance planning ahead for the tax impacts of claiming retroactive R&D credits, 2025 R&D credits, or impact of the Section 174 “fix”? Call Tax Point Advisors at 800-260-4138 or please leave us a message below.
