, are required to be deducted over five years. The new provision delays the date when taxpayers must begin deducting those expenses over five years until after December 31, 2025.
The five-year deduction requirement is especially hard for small and emerging companies, which are critical to driving innovation and improving patient outcomes. Research and development funding is expensive and hard for small companies to afford, given their narrow operating margins.
In his letterto lawmakers earlier this month, Whitaker cited the example of Alva Health, a small company that wrote that the tax provision, if unfixed, would cause delays in getting our lifesaving stroke detection product into the hands of patients in need. He went on to write, For the patients we serve, who rely on the technologies our industry develops, we are pleased to see this provision to fix the damaging change to Section 174 advance and encouraged by the prospect of timely enactment this year.