Bloomberg Tax
March 17, 2023, 9:01 AM

Senators Reintroduce Bill Restoring and Expanding R&D Break

Chris Cioffi
Chris Cioffi
Senior Reporter

A bipartisan Senate duo has revived an effort from last Congress to reverse a change to the research and development tax credit and expand it to apply to more startups and small businesses.

The reintroduced bill, from Sens. Maggie Hassan (D-N.H.) and Todd Young (R-Ind.), would roll back a provision of the 2017 tax law that, starting in 2022, requires companies to amortize their R&D costs over five years rather than the year they are incurred.

“When American companies invest in research and development to develop new products and technologies, it stimulates our economy, promotes job growth, and helps us compete with foreign adversaries,” Hassan said in a statement.

“Our bipartisan bill will help more startups and businesses invest in research and development, and also ensure that they can fully deduct research and development expenses each year,” she added.

  • The bill would also expand the eligibility for the refundable research tax credit, and would gradually raise the cap for that credit for small businesses and startups.
  • During last year’s omnibus spending bill negotiations, Democrats sought to package an enhanced child tax credit with the R&D amortization change and others favored by business, but the parties were unable to strike a deal.

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