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It’s Time to Track Section 174 Research and Development (R&D) Expenses – Interplay with the R&D Tax Credit

By Business Tax, Credits & Incentives, Insights, Tax Planning & Consulting

Effective for tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act (“TCJA”) of 2017 changed the treatment of Internal Revenue Code (“IRC”) Section 174 costs requiring that Research and Development (R&D) costs be capitalized and amortized over a period of 5-years for domestic expenses and 15-years for offshore expenses. Although many hoped that this unfavorable provision from the TCJA would be postponed or removed prior to December 31, 2021, the change remains in effect in 2022.

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