Effective for 2022, research and experimentation (R&E) expenditures are no longer allowed to be deducted as incurred. The Tax Cuts and Jobs Act (TCJA) mandates that, for tax years beginning after December 31, 2021, R&E expenditures be amortized. Absent a legislative change, these changes need to be factored into estimated tax payments, tax returns, and financial statements for tax years beginning after December 31, 2021.
This TaxWatch webcast was a discussion highlighting issues for taxpayers to consider now that the scheduled changes to the treatment of R&E expenditures have taken effect. Key topics included:
- Background of Section 174;
- Changes by TCJA to 174, 41 and 280C, and the ripple effects of those changes;
- Estimated tax and financial statement considerations; and
- Legislative outlook.
This webcast was part of our Washington Wednesdays series that explores the prospects and substance of these potential legislative developments. Visit our Biden Administration Tax Legislation page to access prior webcasts and other related insights.