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Repeal R&D Amortization

ACEC member action is needed to urge lawmakers to cosponsor legislation that will repeal R&D amortization.

Starting on January 1, 2022, Congress changed how firms write off R&D expenses. Previously they could be deducted in the year they were incurred but now must be amortized over five years in most cases.

Amortization of R&D expenses will cause significant cash flow problems for engineering firms and create a disincentive for investment in innovation. It will also place the U.S. at a competitive disadvantage to other countries that provide greater incentives for R&D.

ACEC and its coalition allies built significant support last year for legislation to repeal this requirement but couldn’t come to agreement on this and other pending tax issues. The R&D legislation is being reintroduced in the new Congress and members of the House and Senate need to hear from constituents asking them to cosponsor this critical initiative.

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