The recently passed “One Big Beautiful Bill” (OBBB) Act of 2025 contains a game-changing provision for the technology sector: the permanent restoration of immediate R&D expensing. For years, the requirement to amortize R&D costs over a five-year period acted as a significant drag on cash flow and a tax on innovation. The OBBB has eliminated that barrier for good.
Under the new law, your company can once again deduct 100% of its domestic research and development expenditures in the year they are incurred. This includes not only lab costs but also the salaries of your engineers, developers, and scientists. This change immediately lowers your taxable income, freeing up substantial capital that can be reinvested into hiring top talent, accelerating product development, and scaling your operations.
Even more powerful is the retroactive relief. If your business has average gross receipts under $31 million, you can now file amended tax returns for 2022, 2023, and 2024 to claim a “catch-up” deduction for the R&D costs you were forced to amortize. This can result in a direct and immediate tax refund from the IRS, providing a vital injection of non-dilutive capital. In this new environment, the OBBB has supercharged the financial incentive to innovate here in the United States. It’s time to review your R&D budget and your past tax filings to ensure you are maximizing this new golden age for American tech.
