In a recent letter to the IRS and Treasury, the AICPA urged the agency to provide guidance regarding the recently enacted Sec. 174A, Amortization of Research and Experimental Expenditures, so that small businesses know how to treat domestic research costs on their returns for the 2024 filing period.
Sec. 174A of the One Big Beautiful Bill Act (OBBBA) addresses the treatment of domestic research and experimental expenditures, known as domestic research costs.
The AICPA said it seeks guidance that would allow eligible small businesses to immediately deduct domestic research costs on their originally filed 2024 federal income tax returns rather than being required to capitalize those amounts.
The issue is pressing, the AICPA said, as eligible taxpayers who have not filed income tax returns for the 2024 filing period face uncertainty about whether they can deduct these costs up front or must capitalize them and later amend their returns. Read more.