The Tax Relief for American Families and Workers Act of 2024 (Tax Relief Act of 2024) shines a beacon on innovative businesses of all sizes, extending and expanding crucial tax benefits for research and development (R&D) activities. This legislative boon fosters an environment ripe for groundbreaking advancements, propelling American innovation forward.
Prior to the Shadow:
Preceding the Tax Cuts and Jobs Act (TCJA) of 2017, Section 174 provided companies the flexibility to immediately deduct R&D costs, encouraging investments in the pursuit of new ideas and products. However, the TCJA cast a long shadow, requiring R&D expenses to be capitalized and amortized over five or more years starting in 2022. This heavier tax burden threatened to stifle innovation and hinder the potential of R&D-intensive businesses.
A Lifeline for Innovation:
The Tax Relief Act of 2024 serves as a much-needed lifeline, offering two key advantages: