A small business may elect to reach back to costs paid after 2021
What the document says“An election made under this subparagraph shall be made in such manner as the Secretary may provide and not later than the date that is 1 year after the date of the enactment of this Act.”
The section lets an eligible taxpayer elect to have the effective date rules read December 31, 2021 in place of December 31, 2024. The election must be made in the manner the Secretary provides and within one year of enactment, and the taxpayer must file an amended return for each affected year. An eligible taxpayer is one, other than a tax shelter barred from cash method accounting under section 448(a)(3), that meets the gross receipts test of section 448(c) for the first taxable year beginning after December 31, 2024. The election may be treated as a change in method of accounting for the first affected year, initiated by the taxpayer and made with the Secretary's consent, and a related election on the research credit is treated as timely if made within a year of enactment on an amended return.
What the document actually says“An election made under this subparagraph shall be made in such manner as the Secretary may provide and not later than the date that is 1 year after the date of the enactment of this Act.”
The choice must be made the way the Secretary sets out. It must be made within one year of this law.
A small firm may reach back to costs paid after 2021. It must then amend each affected return. Its size is tested by a receipts rule.
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