The recently enacted One Big Beautiful Bill Act (OBBBA) brings a significant win for innovative businesses: full expensing of domestic research and development (R&D) costs starting in 2025—and retroactive opportunities for some.
At Aldrich, we’ve created a quick reference guide to help companies like yours understand what’s changed and what to do next, no matter where you are in your R&D journey.
How to know if your company may qualify: A quick 5 step diagnostic
- Are you developing or improving products, processes, or software
- Did the work involve technical uncertainty or risk?
- Did your team use a process of experimentation (testing, modeling, iteration)?
- Was the work grounded in engineering, computer science, or similar disciplines?
- Do you have wages, contractor payments, or supply costs tied to these activities?
If you answered yes to several of these, you may benefit from a quick R&D consultation to explore your eligibility. Connect with Alex Bray, JD, LLM, MBA, leader of Aldrich’s Tax Credits and Incentives group.
Never claimed the R&D credit?
You may still qualify to fully deduct eligible R&D expenses, even without filing for the credit. This includes investments in product development, software, and process improvements.
Not sure if you’re eligible?
Eligible R&D spans far beyond scientists in labs. Construction, architecture, engineering, manufacturing, and tech companies may all qualify. Our team can help assess your activities.
Already claimed the credit?
You’ll now be able to pair the credit with immediate expensing for U.S.-based costs, while continuing to amortize foreign R&D over 15 years. This opens up new planning opportunities for 2025 and beyond.
Retroactive options available
Small businesses may be able to apply full expensing retroactively for 2022–2024 by amending prior returns or filing a change in accounting method.
To help you evaluate what’s possible, we’ve created the Aldrich OBBBA R&D Checklist—a one-page resource to help private company leaders identify opportunities under the new law.
