The New R&D Refund Opportunity for 2022–2024!

What Small Businesses Need to Know (And Why It’s Easy to Miss)

Small businesses finally have good news on the R&D front. Thanks to IRS Revenue Procedure 2025‑28, companies with domestic research & experimental (R&E) costs now have a limited‑time opportunity to claim refunds for tax years 2022, 2023, and 2024.

This is a major reversal of the mandatory 5‑year amortization rules that blindsided businesses starting in 2022.

The capitalization rules from Tax Cuts & Jobs Act (“TCJA”) created unexpected tax bills and cash‑flow strain for thousands of founders. Rev. Proc. 2025‑28 gives small businesses a path to retroactively deduct domestic R&E costs rather than amortize them, unlocking cash refunds.

And here’s the kicker: most people don’t even know this relief exists yet.

A Quick Personal Story: Why This Is So Easy to Miss

I’ll be honest, even as a CPA who lives and breathes tax strategy, this update almost slipped past me.

Why? Because the tax world has been flooded with splashy headlines like “No tax on tips!” and “No tax on overtime!”, which have gained more attention due to their broad applicability and social media chatter.

Meanwhile, this R&D refund opportunity, which can bring tens of thousands of dollars back to your business checking account, was quietly issued to the public with little notice.

And if I almost missed it, imagine the founder who is:

• building a product

• managing a team

• putting out fires

• trying to grow

• and definitely not refreshing IRS.gov for fun

  
  

Even tech companies with real R&D activity often miss opportunities like this because they’re too busy running the business or don’t want to spend budget on a credit that may or may not be used down the road.

That’s why this relief matters because it’s a cash refund opportunity that can be used immediately. It deserves more attention.

What Changed? A Quick Recap

Beginning in 2022, the “TCJA” required businesses to capitalize and amortize domestic R&E costs over 5 years.

This meant:

• higher taxable income

• higher tax liabilities

• reduced cash flow

  
  

Rev. Proc. 2025‑28 reverses this for domestic R&E costs and allows small businesses to:

• Immediately deduct domestic R&E expenses for 2022–2024

• Amend prior returns to claim refunds

• Transition into the new rules for 2025 and beyond

  
  

This is a time‑sensitive opportunity and one that can materially improve cash flow.

Do You Need a Full R&D Study?

Not necessarily.

This relief applies to Section 174 domestic R&E costs, which are broader and easier to substantiate than the traditional R&D tax credit.

You likely don’t need a full R&D study if your costs are:

• employee wages for development or experimentation

• U.S. contractor costs

• supplies used in testing or prototyping

• software development expenses

• domestic research activities already tracked in your books

  
  

You do need a study if:

You want to claim the R&D tax credit, which is separate and requires formal substantiation.

But for Section 174 deductions, the IRS relief focuses on:

• identifying domestic (US-based) R&E costs

• applying the new deduction method

• filing the required method change or amended return

A full credit study is optional unless you’re also pursuing the R&D credit.

How much money could this actually put back in your pocket?

Let’s say your business had $300,000 of domestic R&E costs in 2022. Under the old rules (mandatory amortization):

• You could only deduct $60,000 in 2022

• The remaining $240,000 was spread over future years

Under Rev. Proc. 2025‑28:

• You can now deduct the full $300,000 in 2022

• That means $240,000 of additional deductions become available

Refund Calculation Using a 21% Tax Rate

[ $240,000 * 21% = $50,400 refund]

That’s $50,400 back in your pocket for just one year.

Multiply that across 2022, 2023, and 2024, and the refund potential becomes substantial. Think about what your business can do with that cash. Hire a key employee, invest in a second revenue stream, deploy your MVP.

Who Qualifies as a “Small Business”?

If your business:

• has domestic R&E expenses

• was affected by the 2022–2024 amortization rules

• average annual gross receipts for previous 3 years were under $31 million [see Sec 448(c)]

• is not a large multinational with foreign R&E exposure

…you likely qualify for this relief.

How do I Claim the Refund?

Depending on the year, you may need to:

• file an amended return for 2022 and 2023

• file a method change for 2024 and can be included in your next timely filed return

• attach required statements under Rev. Proc. 2025‑28

• document domestic R&E costs

The IRS has provided automatic method change procedures to simplify the process.

What if I’m already overwhelmed and don’t have time to dig into this?

You’re not alone. Most founders are too busy building, hiring, selling, and putting out fires to keep up with every IRS update. That’s exactly why this relief exists and why it’s worth having someone review your 2022–2024 returns for missed R&E deductions.

Final Thought

This is one of the most meaningful tax opportunities for small businesses in years, and it’s incredibly easy to overlook if you’re not watching tax webinars.

If you incurred domestic research & experimentation costs in 2022–2024, you may be entitled to:

• cash refunds

• lower taxable income

• improved cash flow

• a cleaner transition into 2025 rules

And unlike the R&D credit, this relief is much easier to substantiate and does not require an expensive study.

Meliora Consulting PLLC | tax advisory