For more than 70 years, the U.S. tax code allowed companies to currently deduct certain research and development (R&D) expenses. This benefitted manufacturers and businesses in other industries. However, under the Tax Cuts and Jobs Act, since 2022, companies have had to amortize R&D costs over a period of years. Specifically, R&D expenses covered under Sec. 174 include researchers’ wages, research supply costs and facility operating costs. The good news is there’s bipartisan support for proposals in Congress to bring back the immediate deduction for R&D expenses. However, the chances of one of these proposals becoming law depends largely on the outcome of the November election. Stay tuned. Contact the Cg Team with questions. © 2024