On October 20, 2020, the U.S. Senate introduced the American Innovation and Jobs Act (AIJA)—a bipartisan bill that would repeal the upcoming modification to the timing of when a business can claim their R&D tax credit. Senator Maggie Hassan (D-NH) sponsored the bill and Senator Todd Young (R-IN) was a co-sponsor. The bill would continue to allow businesses to deduct their R&D expenses immediately. Currently, businesses can deduct 100% of R&D expenses in the year in which they are incurred. However, in 2022, businesses would be required to allocate those deductions over a period of years, making R&D a pricier activity. Many manufacturers rely on this credit to support innovation and believe if left to expire, the modification would also hamper their ability to compete internationally. AIJA would also make the R&D tax credit more accessible and more generous for small businesses; and it increases to 20% the rate of the credit for business startups. A copy of the bill is available HERE.