Jan 2024 – In a new bi-partisan bill introduced this week, Congress would again allow immediate expensing of domestic R&D research and development costs, a change from last year’s requirement that 2022 costs must be amortized which kicked in as of 2022 as part of the TCJA (Tax Cuts and Jobs Act) of 2017.

The proposed law seeks to delay the application of this rule for research costs related to domestic activities until tax years starting after December 31, 2025, while no change is proposed for activities outside the U.S. While the bill outlines transition rules, no specifics on how to handle R&D costs amortized on a 2022 tax return. Retroactive deductions may require amended returns unless the IRS provides an alternative.