We are thrilled to report a landmark decision from Washington: Congress has passed the "Tax Relief for American Families and Workers Act of 2024," officially restoring immediate R&D expensing.

Since 2022, your business has been forced to amortize R&D costs over five years—a burdensome rule from the 2017 TCJA that hampered cash flow and penalized investment. This new law reverses that policy, retroactively to 2022. This means you can once again deduct 100% of your U.S.-based R&D costs in the year they are incurred.

As our CEO, Damian Smyth, stated, "This is a monumental victory for American competitiveness. Forcing companies to amortize R&D expenses was a direct tax on innovation. Restoring immediate expensing unleashes critical capital, empowering businesses to push the boundaries of science and technology."

At Swanson Reed, we expect this to significantly boost R&D expenditure, and we will be tracking this success with our AI innovation metric, inventionINDEX. We urge our clients to begin reviewing their 2022 and 2023 tax returns immediately to capture the full benefits of this change by filing amended returns.

*About Swanson Reed:*

Swanson Reed is a global advisory firm specializing exclusively in R&D tax credits. Swanson Reed co-developed inventionINDEX, a state and federal patent production metric that aims to monitor and enhance a U.S state's GDP.

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