As taxpayers continue to wonder if there will be a repeal or delay for the federal Section 174 amortization requirement, more states are taking action and passing legislation to decouple from this tax provision.
David Seibel gives an update on R&D Tax Credits now that we’ve wrapped up the 2022 filing season.
In Accounting Today, David Seibel discusses the conforming amendment in Section 280C which has the potential to provide a much-needed boost to companies that also claim the Section 41 R&D Credit.
Audrey Asfoor from our R&D practice joins the podcast with TJ Sponsel to discuss her journey at McGuire Sponsel. She highlights her experience coming from a different industry, overviews her favorite projects thus far, and offers advice to recent college graduates.
As a trusted advisor to CPA firms and their clients, McGuire Sponsel continues to monitor the status of 174 Amortization. While there is still a long way to go before this is resolved, there is at least a conversation taking place in Washington.
Join David Seibel and TJ Sponsel as they walk through distinguishing Section 174 from Section 41. David and TJ overview the current landscape, explain the technical differences, and discuss how CPAs should be approaching this with clients.
In Accounting Today, David Seibel discusses the Consolidated Appropriations Act of 2023. This bill included funding for the federal government for 2023 but left out the much-anticipated tax extenders.
Jerry Hammel and Kyle Riddle give an update on the Section 174 Amortization.
David Seibel gives an update on the Section 174 Amortization.
12/12/22: IRS Issues Guidance for Obtaining Section 174 Change of Accounting Method Consent; 10/24/22: Section 174 Amortization Requirement Leaves Taxpayers Guessing
Georgia and Indiana Latest States to Decouple from Federal Section 174 Amortization Requirement
As taxpayers continue to wonder if there will be a repeal or delay for the federal Section 174 amortization requirement, more states are taking action and passing legislation to decouple from this tax provision. For federal income tax purposes, taxpayers must begin amortizing their Section 174 specified research and experimental costs over five years for domestic research and 15 years for foreign research to determine their federal taxable income for tax years beginning after December 31, 2021. Last week, Georgia and Indiana both enacted tax legislation that updated their Internal Revenue Code conformity dates, but also specifically decoupled from the Section 174 amortization requirement. This will allow taxpayers in these states to fully deduct their research and experimental costs when determining their state tax liability and is retroactive for the 2022 tax year. Georgia and Indiana join other states, such as Wisconsin, Tennessee, and others, that are allowing full research and experimental deductions and providing welcome relief for taxpayers. We will continue to monitor this as well as other Section 174 news and provide updates as they arise.
If you have any questions, please do not hesitate to reach out.
David Seibel is an engineering senior manager for the R&D Tax Credit Practice. He combines his knowledge of tax law with his engineering expertise to maximize companies’ research credits and reduce their overall tax burdens.
David ensures clients are receiving studies that meet the highest level of quality. He conducts fieldwork, produces detailed technical calculations, and builds narratives that accurately reflect each company’s research and experimentation activity.