eBook: United States R&E Amortization & Capitalization Rules Explained [2023 edition]


Tax Day came and went this year, but the IRS’s Section 174 rule remained unchanged, preventing many startups from claiming 2022 research and experimentation (R&E) expenses.

The new capitalization rules for Internal Revenue Code Section 174, which restrict the immediate deduction of R&E expenses, startups in the United States are grappling with increased tax burdens.

This shift has compelled many innovative companies to seek alternative sources of non-dilutive capital to recover the expenses previously covered by the federal government.

Under the revised rules, businesses are now obligated to amortize and capitalize their annual R&E spend, fundamentally altering their financial planning and funding strategies moving forward from January 1, 2022.


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