←back to thread

OBBB signed: Reinstates immediate expensing for U.S.-based R&D

(www.kbkg.com)
336 points tareqak | 1 comments | 05 Jul 25 00:24 UTC | HN request time: 0.209s | source
Show context
n_u ◴[05 Jul 25 00:57 UTC] No.44469277[source]▶
It also classifies software development as R&D which together with immediate expensing for R&D undoes the Section 174 changes as far as I understand.

“For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure“

Page 303 of bill here https://www.congress.gov/119/bills/hr1/BILLS-119hr1eas.pdf

Original article about Section 174 tax code causing layoffs

https://news.ycombinator.com/item?id=44180533

Post from @dang with more info about Section 174

https://news.ycombinator.com/item?id=44226145

replies(3): >>44470452 #>>44470486 #>>44470780 #
1. Thorrez ◴[05 Jul 25 07:31 UTC] No.44470780[source]▶
>It also classifies software development as R&D

The TCJA (passed in 2017) already did that (effective 2022). So it sounds like this new bill is keeping that, but changing the deduction rules back to what they were before 2022.

See this previous discussion of the TCJA:

> all "software development" is now an R&E expense.

https://news.ycombinator.com/item?id=34627712

(AIUI, "R&D" (research and development) and "R&E" (research and experimentation) are synonyms.)