Short answer. Small businesses with average annual gross receipts of $31 million or less can elect to apply Section 174A retroactively and amend 2022-2024 returns to deduct domestic research costs they had to capitalize. Rev. Proc. 2025-28 closes the window on the earlier of July 6, 2026 or each year's refund statute of limitations.
Key facts
| Who qualifies | Average annual gross receipts of $31M or less (Section 448(c) test) |
|---|---|
| What you recover | Domestic research costs capitalized under old Section 174 in 2022-2024 |
| Deadline | Earlier of July 6, 2026 or each year's refund statute of limitations |
| Authority | OBBBA (P.L. 119-21) and Rev. Proc. 2025-28 |
| If you miss it | The catch-up deduction on the 2025 return remains available |
What changed, and why 2022-2024 are recoverable
The 2017 law forced capitalization; the 2025 law reversed it and reached back.
From tax year 2022 through 2024, Section 174 required every business to capitalize domestic research costs and amortize them over five years instead of deducting them in the year spent. For a software company paying engineers out of runway, that inflated taxable income in exactly the years cash was tightest. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) created Section 174A, which restores full expensing of domestic research costs for tax years beginning after December 31, 2024.
For small businesses, the law also reaches backward. A business with average annual gross receipts of $31 million or less under the Section 448(c) test may elect to apply Section 174A retroactively to tax years beginning after December 31, 2021. In plain terms: amend 2022, 2023, and 2024, deduct the research costs that were capitalized, and claim the resulting refunds.
The deadline, precisely
Rev. Proc. 2025-28 sets one outer date and one per-year limit.
The IRS procedure is Rev. Proc. 2025-28: the retroactive election and the amended returns are due by the earlier of July 6, 2026 or the statute of limitations for that year's refund claim. The statute runs per return, typically three years from filing, so the practical window differs by year. For many calendar-year filers 2022 is already at or past the edge, while 2023 and 2024 are usually still open. Your CPA confirms which years remain open against your actual filing dates.
The same outer date governs the Section 280C(c)(2) election for the research credit: it can be made or revoked on an amended return until the earlier of July 6, 2026 or the refund-claim due date. Companies reopening 2022-2024 deductions usually revisit the Section 41 credit for those years in the same pass, which is where documentation becomes the limiting factor.
Amended claims live or die on documentation
A refund claim invites a closer look than an original return ever gets.
Since January 10, 2022, the IRS has required research-credit refund claims to identify the business components and research activities behind the numbers before it will process the claim at all. An amended return that adds or changes research positions for 2022-2024 is exactly that kind of claim, and a narrative written in 2026 about work done in 2022 is the weakest form of evidence.
Engineering teams hold an advantage here that most claimants do not: the contemporaneous record already exists. Commits, pull requests, and review threads from 2022-2024 are timestamped, attributable to named engineers, and specific about what was attempted and what failed. R&D Binder builds the per-year documentation from that history, paired with your payroll register for the dollar side.
Keep going
The rest of the amended-return cluster, and where the binder fits:
Sources
Every claim on this page traces to a primary authority. Each source below is independent and verifiable.
- Rev. Proc. 2025-28 (procedural guidance for OBBBA Section 174A elections and amended returns) - Internal Revenue Service
- 26 U.S.C. ยง 174A (domestic research and experimental expenditures) - Cornell Law School, Legal Information Institute
- IRS, Instructions for Form 6765 - Internal Revenue Service
- BDO, IRS Issues Procedural Guidance on OBBBA Treatment of R&E Expenditures - BDO
- Cherry Bekaert, Rev. Proc. 2025-28: New Guidance on Section 174A - Cherry Bekaert
Get documentation built to survive an exam
R&D Binder builds the per-year documentation an amended claim leans on: business components, four-part-test rationale, and QRE workpapers drawn from your 2022-2024 commit history plus payroll. Your CPA prepares and files the amended returns - we never prepare or sign a return.