One of the provisions in the OBBBA restores current deductibility for the R&D tax credit as it was before the TCJA provision requiring capitalization and amortization starting in 2022. But, there’s a transition rule that allows qualified businesses to make a retroactive election to apply the new rule for R&E expenses paid or incurred in tax years beginning after 2021. This allows for the filing of amended returns to claim the full deduction for 2022-2024 which could result in a significant tax benefit and refund for a taxpayer.
You can expect the promoters of the R&D credit will be jumping all over this and contacting your clients.
In this video I go through the rule change in depth and explain how the transition rule works with an example. It’s critical information for your tax practice and your farming business. I trust you find the information helpful.
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