The American Innovation and R&D Competitiveness Act of 2025 – A Critical Lift for U.S. Small Business & Emerging Technology
On March 10th, Reps. John B. Larson (CT-01) and Ron Estes (KS-04) reintroduced the American Innovation and R&D Competitiveness Act of 2025 (H.R. 1990), which aims to revive critical support for U.S. research and development (R&D). The bill is co-sponsored by Reps. Suzan DelBene (WA-01), Rudy Yakym (IN-02) and 64 additional Democrat and Republican members of Congress. The bill has so far seen tremendous bipartisan support.
If passed, the legislation would restore the ability for businesses to immediately deduct the full cost of their R&D expenses (excluding land investments) - ending a policy that has (since 2022) required expenses to be amortized over five years.
Click here for bill text of The American Innovation and R&D Competitiveness Act of 2025. Click here for a press release from Rep. Larson’s Office with additional background.
Key Benefits:
- Immediate Restoration of R&D Expense Deductibility - Businesses would once again be able to fully deduct research and experimental costs in the same year that they are incurred. This would reverse the amortization requirement established by the 2017 Tax Cuts and Jobs Act (TCJA), which required R&D costs to be spread over five years.
- Optional Amortization - Companies would have the flexibility to amortize costs over a period of 60 months or more - if they choose not to expense them immediately.
- Retroactive Relief - The bill applies retroactively to tax years beginning after December 31, 2021.
What The Bill Means for American Small Business:
For U.S. businesses, particularly emerging technology startups, the restored deduction would translate into tremendous savings that would help them innovate, commercialize, and scale at a more rapid pace.
Since 2022, U.S. companies have amortized an estimated $300 billion in R&D expenses over two tax years, based on NSF data, delaying $240 billion in deductions to future years. A retroactive repeal would unlock that $240 billion for immediate expensing, allowing businesses to revise their 2022–2024 tax filings and secure refunds.
While the bill currently sits in the House Ways & Means Committee, and is working its way through Congress, the bill’s strong bipartisan support signals strong optimism for passage. If it becomes law, it would help onshore American industry, advance U.S. innovation, drive economic growth, and create new American jobs.