On September 8, 2023- the Treasury issued interim guidance via Notice 2023-63 that imposes a significant tax on businesses' research and development funding and is devastating certain small businesses and startups.
Small Business Innovation Research (SBIR), Small Business Technology Transfer (SBTT), and other seed funding awardees are now facing significant, unexpected tax liabilities for the 2023 tax year.
As drafted, N. 2023-63 requires all R&D companies to move the §174 tax treatment, removing the ability to deduct R&D expenses under §162 or §471. This policy change has no basis in the 2017 Tax Cuts and Jobs Act (TCJA) law, or any other laws. And it only exacerbates the impacts of the TCJA amortization rule implemented in 2022.
This change goes into effect for the 2023 tax year!
We must take action now!
