Senators reintroduce R&D Tax Credit legislation
On March 16, Senators Maggie Hassan (D-NH) and Todd Young (R-IN) reintroduced the bipartisan American Innovation and Jobs Act (S. 866), a measure aiming to both allow businesses to once again fully deduct research and development expenses in the year they are made and expand the refundable R&D tax credit.
Back in 2017, President Trump signed the Tax Cuts and Jobs Act of 2017, which contains an R&D amortization requirement—mandating that costs associated with R&D activities be capitalized and amortized over 5 or 15 years instead of allowed for immediate deduction—which went into effect in January 2022. The American Innovation and Jobs Act would reverse this amortization requirement and extend the R&D tax credit to more small businesses. The Act has been referred to the Senate Finance Committee.
According to recent analysis by the National Association of Manufacturers, the manufacturing sector would lose nearly 60,000 jobs and face an output decline of more than $31 billion this year alone if the amortization requirement is not reversed. Accordingly, manufacturers are urging Congress to approve the American Innovation and Jobs Act quickly to support critical research that allows manufacturers to improve lives in America and for people around the world.
View a one-page summary of the American Innovation and Jobs Act.