KPMG article: Guidance under Rev. Proc. 2025-28 on treatment of research and experimentation (R&E) costs after OBBBA
Summarizing options available for transitioning from TCJA to OBBBA treatment of R&E costs
The IRS’s recently released Rev. Proc. 2025-28 provides procedures for making elections and/or accounting method changes to (1) comply with amendments to section 174 and new section 174A under the One Big Beautiful Bill Act (OBBBA) (Pub. L. No. 119-21), (2) accelerate the recovery of unamortized domestic research and experimental (R&E) costs capitalized under section 174 as in effect under the Tax Cuts and Jobs Act (TCJA), and (3) in the case of eligible small business taxpayers, retroactively apply section 174A to domestic R&E costs incurred in tax years beginning after 2021. Read TaxNewsFlash
Read a September 2025 article* prepared by KPMG LLP tax professionals that summarizes the options available for transitioning from TCJA to OBBBA treatment of R&E costs, including favorable options relating to costs incurred in tax years beginning before 2025. The article also discusses certain substantive issues affected by Rev. Proc. 2025-28 and key considerations for taxpayers grappling with how to treat their R&E costs going forward.
* Reproduced with permission from Tax Management International Journal, 9/8/2025. Copyright @ 2025 by Bloomberg Industry Group, Inc. (800-372-1033) http://www.bloombergindustry.com