Big news for startups and innovators: The One Big Beautiful Bill Act (OBBBA) has reversed the “Innovation Tax” under Section 174.
Section 174 Repealed: R&D Expensing is Back
Startups can now fully deduct U.S.-based R&D expenses in the year they’re incurred. If your company earns less than $31M annually, you may be eligible to amend your 2022–2024 tax returns or take a catch-up deduction in 2025–2026.
- This could mean tens or even hundreds of thousands of dollars in refunds or tax savings.
Note: Foreign R&D expenses still must be amortized over 15 years and are excluded from the R&D tax credit.
Deadline to amend returns: July 4, 2026
Schedule a meeting with CTC to explore your eligibility.
