Top Tax Lawmakers Propose to Strengthen R&D Tax Credit
House Ways and Means Committee Chair Jason Smith (R-MO)
(Ways and Means Committee)
Legislation that would strengthen both the R&D tax credit and the child tax credit was announced on Tuesday by the chairs of the House and Senate tax policy committees, Rep. Jason Smith (R-MO) and Sen. Ron Wyden (D-OR).
According to a summary document, the legislation would permit expenses on R&D conducted in the U.S. between the end of 2021 and start of 2026 to be immediately deducted rather than amortized over a five-year period. This change would partially negate a provision of the 2017 tax reform law that weakened the R&D tax credit by requiring the amortization over five years. The legislation has not yet been introduced but will be called the Tax Relief for American Families and Workers Act of 2024.
The level of support for the legislation is not yet clear. Notably, the top Democrat on the House tax committee and the top Republican on the Senate tax committee have not come out in support of the legislation.
