What's Happening?
As businesses finalize their 2025 tax strategies following the One Big Beautiful Bill Act (OBBBA), corporate tax teams are preparing for the 2026 landscape. The recent legislative changes present both opportunities and challenges, particularly in research and development (R&D) taxation and state conformity issues. Companies face decisions on whether to accelerate unamortized Section 174 costs into 2025 or spread them over 2025 and 2026. The return to immediate R&D expensing affects the net R&D credit value, and state conformity issues may lead to constitutional challenges.
Why It's Important?
The strategic planning for 2026 taxes is crucial for businesses to optimize their tax positions and manage compliance risks. The decisions made now will impact federal and state
tax liabilities, cash flow, and overall financial health. The potential constitutional challenges to state conformity with federal R&D provisions could lead to significant legal and financial implications for multistate businesses. Companies that proactively plan and adapt to these changes will be better positioned to navigate the evolving tax landscape.
