I 
119TH CONGRESS 
1ST SESSION H. R. 1990 
To amend the Internal Revenue Code of 1986 to restore the deduction 
for research and experimental expenditures. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 10, 2025 
Mr. ESTES (for himself, Mr. LARSON of Connecticut, Mr. BUCHANAN, Ms. 
DELBENE, Mr. SMITH of Nebraska, Ms. SEWELL, Mr. KELLY of Penn-
sylvania, Mr. BEYER, Mr. SCHWEIKERT, Mr. PANETTA, Mr. LAHOOD, 
Mr. HORSFORD, Mr. ARRINGTON, Ms. BROWNLEY, Mr. SMUCKER, Mr. 
KHANNA, Mr. HERN of Oklahoma, Ms. BONAMICI, Mrs. MILLER of West 
Virginia, Ms. TITUS, Mr. MURPHY, Ms. HOULAHAN, Mr. KUSTOFF, Mr. 
CLEAVER, Mr. FITZPATRICK, Mr. CARBAJAL, Mr. STEUBE, Mrs. 
FOUSHEE, Ms. TENNEY, Ms. SCHOLTEN, Mrs. FISCHBACH, Ms. DAVIDS 
of Kansas, Mr. MOORE of Utah, Ms. CRAIG, Ms. VAN DUYNE, Mr. 
MORELLE, Mr. FEENSTRA, Mr. DAVIS
of North Carolina, Ms. 
MALLIOTAKIS, Mr. HARDER of California, Mr. CAREY, Mr. NEGUSE, Mr. 
YAKYM, Mr. AUCHINCLOSS, Mr. MILLER of Ohio, Mr. PAPPAS, Mr. BEAN 
of Florida, Mr. MOULTON, Mr. MORAN, Mr. MULLIN, Mr. MOOLENAAR, 
Mr. CONNOLLY, Mrs. HARSHBARGER, Ms. MCCLELLAN, Mr. HUIZENGA, 
Mr. KRISHNAMOORTHI, Mr. MANN, Mr. LIEU, Mr. BARR, Ms. JACOBS, 
Mr. CARTER of Georgia, Mr. SWALWELL, Mr. MEUSER, Mr. GARAMENDI, 
Mr. MCCORMICK, Mr. AMO, Mr. EDWARDS, and Mrs. BEATTY) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to restore 
the deduction for research and experimental expenditures. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘American Innovation 
and R&D Competitiveness Act of 2025’’. 
SEC. 2. RESEARCH AND EXPERIMENTAL EXPENDITURES. 
(a) IN GENERAL.—Section 174 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘SEC. 174. RESEARCH AND EXPERIMENTAL EXPENDITURES. 
‘‘(a) TREATMENT AS EXPENSES.— 
‘‘(1) IN GENERAL.—A taxpayer may treat re-
search or experimental expenditures which are paid 
or incurred by him during the taxable year in con-
nection with his trade or business as expenses which 
are not chargeable to capital account. The expendi-
tures so treated shall be allowed as a deduction. 
‘‘(2) WHEN METHOD MAY BE ADOPTED.— 
‘‘(A) WITHOUT
CONSENT.—A taxpayer 
may, without the consent of the Secretary, 
adopt the method provided in this subsection 
for his first taxable year for which expenditures 
described in paragraph (1) are paid or incurred. 
‘‘(B) WITH CONSENT.—A taxpayer may, 
with the consent of the Secretary, adopt at any 
time the method provided in this subsection. 
‘‘(3) SCOPE.—The method adopted under this 
subsection shall apply to all expenditures described 
in paragraph (1). The method adopted shall be ad-
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hered to in computing taxable income for the taxable 
year and for all subsequent taxable years unless, 
with the approval of the Secretary, a change to a 
different method is authorized with respect to part 
or all of such expenditures. 
‘‘(b) AMORTIZATION OF CERTAIN RESEARCH AND 
EXPERIMENTAL EXPENDITURES.— 
‘‘(1) IN GENERAL.—At the election of the tax-
payer, made in accordance with regulations pre-
scribed by the Secretary, research or experimental 
expenditures which are— 
‘‘(A) paid or incurred by the taxpayer in 
connection with his trade or business, 
‘‘(B) not treated as expenses under sub-
section (a), and 
‘‘(C) chargeable to capital account but not 
chargeable to property of a character which is 
subject to the allowance under section 167 (re-
lating to allowance for depreciation, etc.) or sec-
tion 611 (relating to allowance for depletion), 
may be treated as deferred expenses. In computing 
taxable income, such deferred expenses shall be al-
lowed as a deduction ratably over such period of not 
less than 60 months as may be selected by the tax-
payer (beginning with the month in which the tax-
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payer first realizes benefits from such expenditures). 
Such deferred expenses are expenditures properly 
chargeable to capital account for purposes of section 
1016(a)(1) (relating to adjustments to basis of prop-
erty). 
‘‘(2) TIME FOR AND SCOPE OF ELECTION.—The 
election provided by paragraph (1) may be made for 
any taxable year, but only if made not later than the 
time prescribed by law for filing the return for such 
taxable year (including extensions thereof). The 
method so elected, and the period selected by the 
taxpayer, shall be adhered to in computing taxable 
income for the taxable year for which the election is 
made and for all subsequent taxable years unless, 
with the approval of the Secretary, a change to a 
different method (or to a different period) is author-
ized with respect to part or all of such expenditures. 
The election shall not apply to any expenditure paid 
or incurred during any taxable year before the tax-
able year for which the taxpayer makes the election. 
‘‘(c) LAND AND OTHER PROPERTY.—This section 
shall not apply to any expenditure for the acquisition or 
improvement of land, or for the acquisition or improve-
ment of property to be used in connection with the re-
search or experimentation and of a character which is sub-
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ject to the allowance under section 167 (relating to allow-
ance for depreciation, etc.) or section 611 (relating to al-
lowance for depletion); but for purposes of this section al-
lowances under section 167, and allowances under section 
611, shall be considered as expenditures. 
‘‘(d) EXPLORATION EXPENDITURES.—This section 
shall not apply to any expenditure paid or incurred for 
the purpose of ascertaining the existence, location, extent, 
or quality of any deposit of ore or other mineral (including 
oil and gas). 
‘‘(e) ONLY REASONABLE RESEARCH EXPENDITURES 
ELIGIBLE.—This section shall apply to a research or ex-
perimental expenditure only to the extent that the amount 
thereof is reasonable under the circumstances.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 of such Code 
is amended by striking the item relating to section 174 
and inserting the following new item: 
‘‘Sec. 174. Research and experimental expenditures’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 41(d)(1)(A) of such Code is amend-
ed by striking ‘‘specified research or experimental 
expenditures under section 174’’ and inserting ‘‘ex-
penses under section 174’’. 
(2) Section 280C(c) of such Code is amended to 
read as follows: 
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‘‘(c) CREDIT FOR INCREASING RESEARCH ACTIVI-
TIES.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the qualified research ex-
penses (as defined in section 41(b)) or basic re-
search expenses (as defined in section 41(e)(2)) oth-
erwise allowable as a deduction for the taxable year 
which is equal to the amount of the credit deter-
mined for such taxable year under section 41(a). 
‘‘(2) SIMILAR
RULE
WHERE
TAXPAYER
CAP-
ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 
‘‘(A) the amount of the credit determined 
for the taxable year under section 41(a)(1), ex-
ceeds 
‘‘(B) the amount allowable as a deduction 
for such taxable year for qualified research ex-
penses or basic research expenses (determined 
without regard to paragraph (1)), 
the amount chargeable to capital account for the 
taxable year for such expenses shall be reduced by 
the amount of such excess. 
‘‘(3) ELECTION OF REDUCED CREDIT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year for which an election is made 
under this paragraph— 
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‘‘(i) paragraphs (1) and (2) shall not 
apply, and 
‘‘(ii) the amount of the credit under 
section 41(a) shall be the amount deter-
mined under subparagraph (B). 
‘‘(B) AMOUNT OF REDUCED CREDIT.—The 
amount of credit determined under this sub-
paragraph for any taxable year shall be the 
amount equal to the excess of— 
‘‘(i) the amount of credit determined 
under section 41(a) without regard to this 
paragraph, over 
‘‘(ii) the product of— 
‘‘(I) the amount described in 
clause (i), and 
‘‘(II) the rate of tax under sec-
tion 11(b). 
‘‘(C) ELECTION.—An election under this 
paragraph for any taxable year shall be made 
not later than the time for filing the return of 
tax for such year (including extensions), shall 
be made on such return, and shall be made in 
such manner as the Secretary may prescribe. 
Such an election, once made, shall be irrev-
ocable. 
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‘‘(4) CONTROLLED GROUPS.—Paragraph (3) of 
subsection (b) shall apply for purposes of this sub-
section.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
Æ 
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