The American Innovation and R&D Competitiveness Act – The Bill’s Text is Published and What You Need to Know

The text of the American Innovation and R&D Competitiveness Act of 2025 (H.R. 1990) is now available on Congress.gov (here).

This bipartisan bill, as introduced on March 10, 2025, would:

1. Restore immediate deductibility of R&E expenditures; and

2. Would apply retroactively to taxable years beginning after December 31, 2021.

Why is this bill so critical to innovation and the US economy?

The shift to mandatory amortization in 2022 created financial challenges by increasing tax liabilities in the short term. By restoring the immediate deduction for R&E expenses, this bill would provide much-needed support for innovation across industries like technology, healthcare, manufacturing, and beyond.

This legislation has broad bipartisan support—an encouraging sign that lawmakers recognize the importance of fostering innovation in the U.S. economy.

Folks familiar with the "state of play" for this bill say the likely vehicle for this bill would be as part of the broader (and ongoing) budget reconciliation processes.

What’s likely next and what about timing?

There is evidence suggesting that House Republicans are aiming to complete the budget reconciliation process by Memorial Day 2025. Speaker Mike Johnson has explicitly stated this goal, reflecting an aggressive timeline for advancing the reconciliation bill to the President's desk by May 26. This aligns with a broader Republican strategy to expedite legislative priorities, such as extending Trump-era tax cuts and addressing fiscal policy through reconciliation.

However, achieving this timeline faces significant challenges. Senate leaders, including Majority Leader John Thune, have indicated that July or later is a more realistic target, with some senators suggesting the process could extend into the fall. Disagreements between the House and Senate over the scope and structure of the reconciliation package—such as whether to pursue one comprehensive bill or divide it into two—further complicate the timeline.

While Memorial Day remains a stated goal for House Republicans, delays due to negotiations and procedural hurdles make this deadline ambitious and uncertain.

I would love to hear your voice!

If you are a business impacted by these onerous capitalization requirements, how are you making your story heard? How are you showing support for the passage of this important fix?

I have some suggestions. Please reach out on Linkedin (here) or schedule some time directly on my calendar (here).