Tax Relief for R&D: Immediate Deductions and Increased Support for Small Businesses.
This legislation aims to boost domestic innovation by restoring the ability for businesses to immediately deduct Research and Development (R&D) costs from their taxes. It significantly increases the refundable tax credit available to small businesses and startups, making it easier for them to fund innovation. Crucially, these tax benefits are denied for R&D activities conducted in nations considered foreign adversaries.
Key points
Businesses can immediately deduct R&D expenses, rather than spreading them over several years, improving cash flow for innovation projects.
Tax benefits for R&D are prohibited if the research is conducted in countries deemed foreign adversaries, protecting US technological advantage.
The maximum refundable R&D tax credit for small businesses increases from $250,000 up to $750,000, and the gross receipts eligibility limit rises from $5 million to $15 million.
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