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Can the R&D Tax Credit Offset the Section 174 Changes?

September 9, 2023

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Jonathan Cardella

Strike Summary

  • There are certain restrictions when taking advantage of both Sections 174 deduction/capitalization and Section 41, which can be seen in Section 280C.
  • Businesses that choose to elect Section 280C for their federal taxes could also lower their state taxes as well.
  • Taxpayers that want to use Section 280C must plan ahead because it can only be used on an originally filed return.
  • The recent passage of the Tax Cuts and Jobs Act may have have affected whether a taxpayer should use Section 280C in their tax strategy.

Work with Strike to navigate tax changes with ease.

Schedule a MeetingBook a Consultation

Jonathan Cardella, CEO of Strike Tax Advisory, joins Michele Hansen, host of the Software Social podcast and Co-Founder of Geocodio, to talk R&D tax credits and answer the commonly asked question: can the R&D tax credit offset the Section 174 changes? 

Listen in as Jonathan explains the R&D tax credit, breaks down the new Section 174 changes, and ties them both together. While Strike acts as a specialty tax credit advisory firm, we strongly encourage all business owners to work through their tax situation with their tax professional.


For additional resources regarding the R&D Tax Credit or recent Section 174 Changes, find them here: 
Learn more about the R&D Tax Credit and how it may help you.
Visit our page on Section 174 Changes to stay up to date.
If you're not claiming the R&D tax credit, our R&D Tax Credit Calculator can estimate credits you might be owed.

Work with Strike to navigate tax changes with ease.

Schedule a MeetingBook a Consultation

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