Big Beautiful Bill New Tax Law Reopens the Door for R&D Refunds
The passage of the One Big, Beautiful Bill (OBBB) in July 2025 marked a dramatic shift for companies investing in innovation. Most notably, the legislation reversed a key provision of the Tax Cuts and Jobs Act (TCJA), restoring immediate expensing for U.S.-based R&D under Section 174, retroactive to 2022. This change isn’t just technical; it’s a powerful opportunity for qualified businesses to unlock value through amended tax returns.
What’s Changed and Why It Matters
Until now, companies were required to deduct domestic R&D expenses over five years. This created a significant tax burden, particularly for small to midsize businesses that previously enjoyed immediate expensing.
Under the new law, businesses with average annual gross receipts of $31 million or less can amend their 2022, 2023, and 2024 returns to deduct R&D costs in full and potentially claim cash refunds. All other businesses will be able to deduct the unamortized R&D expenses on their 2025 tax return or, in some cases, over two years.
Even if your company did not claim the R&D tax credit previously or worked with a third-party provider outside CSH, you may now benefit from a fresh look. The refund potential is real and significant.
New Filing Requirements to Know
Companies should be aware of increased reporting obligations starting with tax year 2025. IRS Form 6765 now requires the completion of Section G for most filers, which means:
At least 80% of total qualified research expenses (QREs) must be reported by business component (up to a max of 50 components), listed in descending order.
You must provide a clear description of what each business component was intended to discover or improve, essentially articulating the purpose of the R&D work.
Officer wages that count toward QREs must also be separately disclosed, a move seen by some as an audit flag for abuse.
However, qualified small businesses, defined as those with QREs under $1.5 million and gross receipts under $50 million, are exempt from completing Section G, reducing the documentation burden.
A Strategic Opportunity for CSH Clients
If your company engages in product development, engineering innovation, or software development, this legislative update is your signal to act. Many businesses that capitalized R&D expenses may now qualify for significant refunds by amending returns.
CSH’s tax team is ready to help evaluate your eligibility, perform credit studies, and handle the complexities of amended filings. We can also advise on how to prepare for the 2025 documentation standards to ensure compliance going forward.
Don’t leave money on the table. Reach out to our team to explore how these changes could benefit your business and spark meaningful savings.
