US SB1639

Restores immediate expensing of research and development costs by amending Section 174 of the Internal Revenue Code, allowing taxpayers to deduct R&D expenditures in the year incurred rather than amortizing them over 5 years, effective retroactively for taxable years beginning after December 31, 2021

Increases the refundable R&D tax credit cap for small businesses from $250,000 to $500,000 starting in 2025, with annual $25,000 increases reaching $750,000 by 2035

Expands eligibility for the small business R&D credit by raising the gross receipts threshold from $5 million to $15 million and extending the eligibility window from 5 to 8 taxable years after the company's startup date

Provides enhanced research credit rates for qualified small businesses, increasing the alternative simplified credit from 14% to 20% and allowing a 10% rate option under certain calculations

Introduced May 7, 2025 with bipartisan support from 34 senators and referred to the Senate Committee on Finance