If the R&D Tax Credit is restored to its pre-2017 structure, qualifying manufacturers and integrators could fully deduct research and development expenses in the same year they are incurred.
There’s good news on the horizon for companies that prioritize innovation and technology. Through the American Innovation and R&D Competitiveness Act of 2025, Congress is considering legislation that would reinstate the Research & Development (R&D) Tax Credit to its previous, more beneficial form.
In 2017, the rules for the R&D Tax Credit changed, requiring companies to amortize expenses over five years for domestic research and 15 years for foreign research. By restoring the tax provision to pre-2017 structure, however, qualifying manufacturers and integrators could once again fully deduct research and development expenses in the same year they are incurred, providing immediate tax relief.
This proposed legislation would:
- Restore immediate expensing by eliminating amortization requirements
- Allow taxpayers to amortize certain expenses over at least 60 months
- Apply these changes to tax years beginning after Dec. 31, 2021
If this happens, the R&D Tax Credit could help connect integrators and manufacturers to the capital they need to remain competitive—and give them more flexibility to deal with economic uncertainties—in an environment where tariffs are unpredictable and set to disrupt supply chains.
As NSCA has seen with integrators in the past, this incentive can provide substantial savings if a member’s activities related to product and/or process improvements are eligible.
For example, in the past, several NSCA members have experienced savings as a result of the R&D Tax Credit:
- Iowa integrator received $300,000 in tax credits
- Missouri integrator received $200,000 in tax credits
- Indiana integrator received $250,000 in tax credits
- California integrator received $800,000 in tax credits
- Missouri integrator received $1.1 million in tax credits
By leveraging the R&D Tax Credit, integrators and manufacturers can reduce tax liability and free up funds to absorb additional costs brought on by tariffs. They can also improve cashflow to counteract tariff impacts.
NSCA CEO Emeritus Chuck Wilson recently worked with NSCA Business Accelerator alliantgroup to pen an article for Manufacturing.net on this very topic. Learn more about the topic at the link below, and let us know if you have any questions!
