R&D Notice: IRC Section 174 Amortization Guidance

IRC Section 174 Amortization

The Tax Cuts and Jobs Act (“TCJA”) amended IRC Section 174 requiring the capitalization and amortization of specified research or experimental (“SRE”) expenditures for tax years beginning after December 31, 2021. The IRS issued Notice 2023-63 on September 8, 2023, providing interim guidance for taxpayers implementing the new Required Section 174 method. The notice is effective for tax years ending after September 8, 2023. The IRS noted the following specific areas it intends to address in forthcoming proposed regulations:

  • Capitalization and amortization of SRE expenditures, including identification of SRE expenditure types and allocation methods;
  • The treatment of SRE expenditures under Section 460, Long Term Contracts; and
  • The application of Section 482 to cost sharing arrangements involving SRE expenditures.

Link to: Notice 2023-63


Paige Riordon-5180

Paige Riordon CPA, Principal, R&D Tax Credit Leader

Paige serves as BRC’s Research Credit Leader out of the Greensboro, NC office. Paige has almost 20 years of experience assisting clients with Research Credits across a variety of industries, including consumer products, life sciences, manufacturing, pharma, software, and technology. Paige uses her experiences to customize studies to fit each client’s unique needs while […]


The information contained in this article is for informative purposes only and should not be relied on when making any business, legal, or other decisions. This information may be updated without notice and/or may not contain the most current information that is available related to this topic. Please consult with your advisor to determine how this information applies to your specific facts and circumstances.