Yair Holtzman and Sharlene Sylvia-Casimir of BKR Member Firm Anchin Accountants and Advisors (New York) have published the article, “OBBBA, The Research Credit, and Section 174,” in the February 2026 issue of Practical Tax Strategies.
This article explores the impact of the One Big Beautiful Bill Act of 2025 (OBBBA) on the research credit and the tax treatment of research and experimental (R&E) expenditures. The legislation restores full expensing of domestic R&E costs in the year incurred for tax years beginning after 31 December 2024, reversing the capitalization and amortization rules introduced under the Tax Cuts and Jobs Act. Foreign R&E expenditures, however, will continue to be amortized over 15 years, reinforcing the policy focus on incentivising U.S.-based research and development.
The authors also examine IRS Revenue Procedure 2025-28, which provides guidance on elections, accounting method changes, and retroactive relief—particularly for small businesses. Key considerations include the reinstatement of pre-TCJA Section 280C rules, new flexibility under Section 174A, and options to accelerate the deduction of previously capitalised R&E costs. Overall, the changes offer greater cash-flow and tax-planning flexibility, while requiring careful evaluation to maximise benefits and ensure compliance.
Thank you Anchin Accountants and Advisors (New York) for sharing this article with us!
Read the article in full here.
