1. Home
  2. |Insights
  3. |House Committee Passes Part of “Big, Beautiful Bill” Containing Noteworthy Improvements to Research and Development Incentives for Companies

House Committee Passes Part of “Big, Beautiful Bill” Containing Noteworthy Improvements to Research and Development Incentives for Companies

Client Alert | 2 min read | 05.16.25

On May 13, the House Ways and Means Committee passed “The One, Big Beautiful Bill.” This bill includes several provisions that, if enacted, will be important to businesses claiming research and development incentives:

  • Immediate Expensing for Domestic Research and Experimentation (“R&E”) under Section 174
    • The bill would suspend the current amortization requirement for domestic R&D expenses and allow companies to fully deduct domestic research costs in the year incurred for tax years beginning January 1, 2025 and ending December 31, 2029.
    • A new section, IRC Section 174A, would govern the temporary rules for domestic R&E expenditures during the suspension period.
  • Software Development Included as R&E Expenditure
    • Amounts paid or incurred in connection with software development would be treated as R&E expenditures eligible for immediate expensing during the suspension period.
  • Exclusions from Immediate Expensing
    • The bill provides that some expenditures are ineligible for immediate expensing, including expenditures for the acquisition or improvement of land, expenditures for the acquisition or improvement of property subject to depreciation or depletion allowances, and expenditures for locating mineral deposits, including oil and gas.
  • Alignment with Section 41 Research Credit
    • The proposed legislation would amend IRC Section 41(d)(1)(A) to include references to domestic R&E expenditures under Section 174A, ensuring consistency in the definition of qualified research expenses.​
  • Deduction Limitations
    • IRC Section 280C(c) would be amended to address the treatment of deductions related to domestic R&E expenditures, preventing double benefits.​

Congress’ Next Steps

The tax bill will be combined with other House Committee’s work, and Republican Leadership likely will make further changes to find agreement among the slim House majority before moving the bill through the full House of Representatives. If the bill passes, it will proceed to the Senate where further, extensive changes are expected. The House and Senate will have to reconcile the differences between the two bills, potentially requiring another vote in each chamber. The bill faces significant legislative and political hurdles that may complicate or delay its enactment.

Key Takeaways and Predictions

Companies, especially small and mid-sized firms, will welcome the return of immediate R&E expensing if enacted into law. We expect that R&E expensing will likely survive the reconciliation process due to wide support among the business community and bipartisan backing.

“The One, Big, Beautiful Bill” still has numerous hurdles to overcome, and Congress is under a tight timeline given a mid-July deadline for lifting the debt ceiling and a requirement that the budget reconciliation process must be used by September 30, 2025. Due to this timing, Republican Leadership intends to send the bill to President Trump for signature by July 4th.

Contacts

Insights

Client Alert | 4 min read | 08.07.25

File First, Facts Later? Eleventh Circuit Says That Discovery Can Inform False Claims Act Allegations in Amended Complaints

On July 25, 2025, the Eleventh Circuit Court of Appeals issued its decision in United States ex. rel. Sedona Partners LLC v. Able Moving & Storage Inc. et al., holding that a district court cannot ignore new factual allegations included in an amended complaint filed by a False Claims Act qui tam relator based on the fact that those additional facts were learned in discovery, even while a motion to dismiss for failure to comply with the heightened pleading standard under Federal Rule of Civil Procedure 9(b) is pending.  Under Rule 9(b), allegations of fraud typically must include factual support showing the who, what, where, why, and how of the fraud to survive a defendant’s motion to dismiss.  And while that standard has not changed, Sedona gives room for a relator to file first and seek out discovery in order to amend an otherwise deficient complaint and survive a motion to dismiss, at least in the Eleventh Circuit.  Importantly, however, the Eleventh Circuit clarified that a district court retains the discretion to dismiss a relator’s complaint before or after discovery has begun, meaning that district courts are not required to permit discovery at the pleading stage.  Nevertheless, the Sedona decision is an about-face from precedent in the Eleventh Circuit, and many other circuits, where, historically, facts learned during discovery could not be used to circumvent Rule 9(b) by bolstering a relator’s factual allegations while a motion to dismiss was pending.  While the long-term effects of the decision remain to be seen, in the short term the decision may encourage relators to engage in early discovery in hopes of learning facts that they can use to survive otherwise meritorious motions to dismiss....

View All Insights