Aug. 22 at 8:34 PM
$NLST Donald Trump on July 4, 2025, titled the "One Big Beautiful Bill Act," permanently restored the immediate deduction of domestic research and development (R&D) expenses. This reversed a policy from the 2017 Tax Cuts and Jobs Act (TCJA) that had required businesses to spread these deductions out over five years.
Key provisions of the One Big Beautiful Bill Act
The new law addresses the R&D deduction in several ways, with specific rules for domestic vs. foreign R&D and retroactive relief for some companies.
Immediate domestic R&D expensing
For 2025 and beyond: Domestic R&D expenses can now be fully deducted in the year they are incurred.
Small businesses: For tax years beginning after December 31, 2021, and before January 1, 2025, small businesses (with average annual gross receipts of
$31 million or less) can apply for retroactive relief. This allows them to file amended returns to fully expense their R&D costs for those years.
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