Training for Tomorrow: AI, Tax Incentives & Workforce Strategy

Artificial intelligence is changing how businesses operate, train employees, develop products, and approach innovation, but what does that mean from a tax perspective?

In this episode of Let’s Talk Tax, host Dave McGuire is joined by David Seibel, EA, to explore how AI investments may intersect with the R&D tax credit, workforce strategy, data security, and emerging tax policy. They discuss the proposed AI Workforce Training Act, which would create a tax credit for qualifying employee AI training expenses, and explain why businesses must carefully protect confidential client information when using public AI tools.

Dave and David also examine when AI-related activities may qualify for the R&D tax credit. While developing proprietary models, automated systems, or new AI capabilities may satisfy the credit’s requirements, purchasing or implementing existing technology does not automatically qualify. The conversation highlights the importance of technical uncertainty, experimentation, and the distinction between development and implementation.

Additional topics include AI-powered manufacturing automation, computer leasing and token costs, internal-use software requirements, and how AI adoption may affect qualified research expenses. David also explains how eligible startups may use the R&D payroll tax credit and why companies employing foreign research or software development teams must continue considering Section 174’s 15-year amortization requirement.

Listen to learn how businesses and their CPA advisors can evaluate AI investments, identify potential tax opportunities, and prepare for a workforce increasingly shaped by artificial intelligence.