The Research and Development (R&D) tax credit was designed to encourage innovation across a broad range of industries, not just scientists in a lab. Eligible activities often span sectors like architecture, engineering, construction, manufacturing, software development, and product design—anywhere businesses are developing new or improved processes, products, or technologies.
The recently enacted One Big Beautiful Bill Act (OBBBA) presents significant R&D opportunities for businesses, including the ability to fully deduct domestic R&D expenses in the year they’re incurred, starting in 2025. The law also allows certain companies to retroactively deduct previously capitalized R&D costs from recent tax years.
What it Means for Private Companies
The OBBBA change presents a valuable opportunity for businesses investing in innovation. From product development to process improvements, many companies may already qualify without realizing it. In addition to expensing changes the new law also provides considerations for amortization of foreign R&D and accelerated recovery for larger businesses.
The Aldrich R&D OBBBA checklist can help you identify potential considerations for your company under the new legislation.
