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Understanding R&D Tax Credits and Amortization: Navigating Changes and Maximizing Benefits
Understanding R&D Tax Credits and Amortization: Navigating Changes and Maximizing Benefits
Encouraging and supporting research and development (R&D) has been a fundamental principle in U.S. tax policy. The R&D tax credit allows many small and medium businesses to innovate and financially grow. However, in 2022, the Congress implemented a significant change to IRC Section 174 which mandates R&D costs to be amortized over five years, rather than taking an immediate deduction. This resulted to a substantial tax burden on businesses. To ensure compliance and maximize the benefits of R&D tax credits, companies must keep tabs on the new legislative developments that will likely impact their tax liability. Listen as a panel of […]
