Major Tax Relief for U.S. Innovators: Immediate R&D Expensing Restored by Congress

Congress restores immediate R&D expensing retroactive to 2022, easing tax burdens, boosting innovation, and fueling U.S. competitiveness.

FORT WORTH, TX, UNITED STATES, September 15, 2025 /EINPresswire.com/ -- In a landmark decision for American innovation, Congress has passed legislation that retroactively restores immediate expensing for domestic research and development (R&D) costs. The new law reverses a burdensome provision of the 2017 Tax Cuts and Jobs Act (TCJA) that, since 2022, had forced businesses to capitalize and amortize these critical investments over five years.

The amortization requirement had been widely criticized for increasing the tax burden on innovative companies, stifling investment, and reducing cash flow for startups and established tech firms alike. By mandating that businesses spread deductions over five years, the previous rule created a significant financial drag that hampered the ability of companies to reinvest in new projects and personnel.

The "Tax Relief for American Families and Workers Act of 2024" directly addresses this issue by reinstating the long-standing practice of allowing businesses to deduct 100% of their U.S.-based R&D expenditures in the year they are incurred. This change is retroactive to the 2022 tax year, offering substantial relief to companies that have been operating under the amortization rule.

"This is a monumental victory for American competitiveness and ingenuity," said Damian Smyth, CEO of Swanson Reed. "Forcing companies to amortize R&D expenses was a direct tax on innovation. Restoring immediate expensing unleashes critical capital, empowering businesses to push the boundaries of science and technology, create high-paying jobs, and secure our nation's economic future. It's the right policy at the right time, and we commend the bipartisan effort that made it a reality."Swanson Reed expects that the new legislation will increase business expenditure on R&D and thus patent production. It will track the success of the OBBB with its new AI innovation metric called inventionINDEX (www.inventionindex.com)

The restoration of immediate R&D expensing is expected to provide a significant boost to industries that rely heavily on research, including technology, manufacturing, software development, and pharmaceuticals. Tax professionals are advising businesses to immediately review their tax returns from 2022 onward to identify opportunities for amended filings and capture the full benefits of this legislative change.

*About Swanson Reed:*

Swanson Reed is a global advisory firm specializing exclusively in R&D tax credits. Swanson Reed co-developed inventionINDEX, a state and federal patent production metric that aims to monitor and enhance a U.S state's GDP.

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