American Innovation and Jobs Act
Sponsored By: Senator Todd Young
Introduced
Summary
Immediate expensing of research and experimental expenditures would be restored and strengthened to let businesses deduct R&D costs sooner and speed tax relief for innovation. The bill also creates a fallback amortization path and updates how R&D deductions interact with the research tax credit.
Show full summary
- Companies that fund research and development would be able to treat qualifying R&E spending as deductible in the year paid or incurred instead of capitalizing it, with an option to instead amortize certain costs over at least 60 months.
- Tax accounting rules would let taxpayers adopt the section 174 method in their first year without Secretary approval or switch later with consent, and the chosen method must remain consistent across years unless officially changed.
- Claimants of the research tax credit would see updated rules for how section 41 credits and section 174 deductions interact, including an irrevocable election to accept a reduced credit in certain cases and related basis adjustments.
The changes would apply to amounts paid or incurred in taxable years beginning after December 31, 2021.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 3 benefits, 0 costs, 1 mixed.
Bigger refundable R&D credit cap
This bill would replace the $250,000 refundable cap on the R&D credit with a rising "applicable amount." The cap would be $500,000 for tax years starting after Dec. 31, 2024, and would increase stepwise to $750,000 for years starting after Dec. 31, 2034. It would also relax startup tests and dollar limits so more small firms qualify for the refundable credit. These changes would apply to taxable years beginning after Dec. 31, 2024.
Higher R&D credit rates for startups
If enacted, qualified small businesses could use higher R&D credit rates. The bill would raise the main alternative rate to 20% (up from 14%) and let certain taxpayers substitute 10% for 6% under an alternate method. Startups could also average research spending by ignoring zero‑research years in the three‑year comparison. These options would apply for tax years beginning after the date of enactment.
Immediate expensing for R&D costs
This bill would let businesses treat most research and experimental costs as current tax deductions instead of capitalized costs. Taxpayers could also elect to amortize some research costs ratably over at least 60 months, starting when benefits begin. The rule would not apply to exploration costs or to buying or improving land and some depreciable or depletable property. These changes would apply to tax years beginning after Dec. 31, 2021.
R&D credit and deduction rules
If enacted, taxpayers who claim the §41 research credit would not be able to deduct the portion of research costs equal to the credit. If the credit is larger than deductible expenses, the excess would reduce amounts charged to capital accounts. Taxpayers could instead make an irrevocable election on their return to accept a reduced credit (computed using their corporate tax rate) and keep the deduction. These rules would apply to tax years beginning after Dec. 31, 2021.
Sponsors & CoSponsors
Sponsor
Todd Young
IN • R
Cosponsors
Maggie Hassan
NH • D
Sponsored 5/7/2025
James Lankford
OK • R
Sponsored 5/7/2025
Jeanne Shaheen
NH • D
Sponsored 5/7/2025
Steve Daines
MT • R
Sponsored 5/7/2025
Mark Warner
VA • D
Sponsored 5/7/2025
John Barrasso
WY • R
Sponsored 5/7/2025
Jacky Rosen
NV • D
Sponsored 5/7/2025
Thomas Tillis
NC • R
Sponsored 5/7/2025
Gary Peters
MI • D
Sponsored 5/7/2025
Roger Marshall
KS • R
Sponsored 5/7/2025
Alex Padilla
CA • D
Sponsored 5/7/2025
Tommy Tuberville
AL • R
Sponsored 5/7/2025
Patty Murray
WA • D
Sponsored 5/7/2025
John Kennedy
LA • R
Sponsored 5/7/2025
Amy Klobuchar
MN • D
Sponsored 5/7/2025
Pete Ricketts
NE • R
Sponsored 5/7/2025
Mark Kelly
AZ • D
Sponsored 5/7/2025
Katie Britt
AL • R
Sponsored 5/7/2025
Timothy Kaine
VA • D
Sponsored 5/7/2025
Shelley Capito
WV • R
Sponsored 5/7/2025
Catherine Cortez Masto
NV • D
Sponsored 5/7/2025
Deb Fischer
NE • R
Sponsored 5/7/2025
Tammy Baldwin
WI • D
Sponsored 5/7/2025
Jerry Moran
KS • R
Sponsored 5/7/2025
Sen. Luján, Ben Ray [D-NM]
NM • D
Sponsored 5/7/2025
Bill Hagerty
TN • R
Sponsored 5/7/2025
Christopher Coons
DE • D
Sponsored 5/7/2025
Markwayne Mullin
OK • R
Sponsored 5/7/2025
Elissa Slotkin
MI • D
Sponsored 5/7/2025
Roger Wicker
MS • R
Sponsored 5/7/2025
Angus King
ME • I
Sponsored 5/7/2025
Ted Budd
NC • R
Sponsored 5/7/2025
Jon Ossoff
GA • D
Sponsored 5/7/2025
Jon Husted
OH • R
Sponsored 5/7/2025
Martin Heinrich
NM • D
Sponsored 5/7/2025
Roll Call Votes
No roll call votes available for this bill.
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