Domestic Research Expensing (Section 174A): CPA Guide | HelloBooks US research costs are deductible in the year paid again. The catch-up options for 2022 to 2024 costs and what stays on 15-year amortization.
For tax years beginning after 2024, US research and experimental costs can be deducted when paid. Costs capitalized in 2022 to 2024 have their own catch-up options, and foreign research still amortizes over 15 years.
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Domestic R&E
Deduct in year paid
Applies: Tax years beginning after 2024From IRS.gov · checked October 10, 2026
Research done in the United States is deductible in the year paid for tax years beginning after 2024. Research done abroad must still be capitalized and spread over 15 years.
Domestic costs that were capitalized in 2022, 2023 and 2024 can be deducted in full in the first 2025 tax year, or spread over two years. The election for eligible small businesses to apply the change back to those years had to be made by July 6, 2026.
Software companies, product developers and any client that pays engineers or contractors to build something new. Confirm where the work was performed, because the domestic and foreign treatment now differ sharply.
Tag research-related bills and payroll to a separate account or project during the year, with the contractor’s location on file. That turns the domestic versus foreign split into a report rather than a year-end interview.
The plain-English summary for business owners
Business returns · Form 4562
Information returns · payments from 2026
Payroll and information returns · 2026
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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