alt Hacker NewsIt also classifies software development as R&D which together with immediate expensing for R&D undoes the Section 174 changes as far as I understand.
“For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure“
Page 303 of bill here https://www.congress.gov/119/bills/hr1/BILLS-119hr1eas.pdf
Original article about Section 174 tax code causing layoffs
https://news.ycombinator.com/item?id=44180533
Post from @dang with more info about Section 174
Replies
Page 301
> there shall allowed as a deduction any domestic research and experimental expenditures which are paid or incurred by the taxpayer in the current taxable year
AFAIK, there was no domestic vs. foreign R&D distinction in section 174 before.
>It also classifies software development as R&D
The TCJA (passed in 2017) already did that (effective 2022). So it sounds like this new bill is keeping that, but changing the deduction rules back to what they were before 2022.
See this previous discussion of the TCJA:
> all "software development" is now an R&E expense.
https://news.ycombinator.com/item?id=34627712
(AIUI, "R&D" (research and development) and "R&E" (research and experimentation) are synonyms.)