New Tax Bill: R&D Expenditure Treatment

There’s a ton to digest in the new tax bill, including (as most concerning to us!) R&D expenditures and the § 41 R&D tax credit (RTC).

I.R.C. Section 174 formerly allowed taxpayers to decide to treat research and experimentation (R&D) expenditures as either deductible expenses or to capitalize these expenditures*, however, the new tax bill dictates R&D account expenditures must be capitalized.

Q: Does this impact the R&D tax credit?

A: The short answer is no. The updated §174, like the old §174, prevents…