When Congress changed Section 174 in 2022, many businesses suddenly found themselves paying significantly more in taxes than expected.

The recent passage of the One Big Beautiful Bill Act (OBBBA) created a temporary opportunity for qualifying businesses to revisit those prior years, amend returns, and potentially recover meaningful tax savings before the July 6, 2026 deadline.

But the rules, eligibility requirements, and filing windows have created a lot of confusion.

This FAQ covers the most common questions businesses are asking about Section 174 amortization, retroactive R&D tax credit claims, qualification requirements, statute of limitations considerations, and what companies should know before the filing window closes.

What is Section 174 amortization?

Section 174 amortization refers to the rule that required businesses beginning in 2022 to spread research and development deductions over multiple years instead of deducting them immediately.

What changed under the OBBBA?

The OBBBA restored immediate R&D expensing beginning in 2025 and created a retroactive election allowing certain small businesses to amend prior returns and claim tax credits without having to amortize the expenses used to calculate those credits. It also allowed businesses that did amortize research expenses during 2022-2024 to accelerate the deductability of any as yet unamortized expenses.

Can businesses amend 2022 R&D expenses?

In many cases, yes. Qualifying businesses may be able to amend 2022 tax returns and reverse prior Section 174 amortization treatment, subject to statute of limitations deadlines.

What businesses qualify for the retroactive election?

Generally, businesses averaging $31M or less in gross receipts during years 2022-2024 may qualify, though eligibility depends on several factors.

What industries qualify for the R&D tax credit?

Many industries qualify, including agriculture, software, manufacturing, architecture, engineering, construction, food and beverage production, and cybersecurity.

Why Businesses Are Re-Evaluating Prior R&D Claims

The July 6, 2026 deadline created a narrow window for qualifying businesses to revisit prior tax years and potentially recover meaningful savings tied to research and development activities.

But many businesses still aren’t sure whether they qualify, how Section 174 impacts prior filings, or what steps they should take before the window closes.

That uncertainty is exactly why many companies are taking a closer look now instead of waiting until the last minute.

If your business invested in product development, engineering, software, manufacturing, or process improvement between 2022 and 2024, it may be worth evaluating whether there’s still an opportunity available before the filing window closes.