R&D Costs Incurred 2022 and Later
Starting in 2022, taxpayers are no longer allowed to currently deduct R&D expenditures. Instead, they have to amortize (deduct) them over five tax years, beginning with the midpoint of the tax year in which the specified research or experimental expenditures are paid or incurred. R&D expenses incurred outside the United States must be deducted over 15 years. In Turbotax type is L - amortizable intangibles and the code section is 174
Tax Credit for R&D Expenses
In addition to a tax deduction for R&D expenses, a tax credit is available. Unlike a deduction, which only reduces taxable income, a tax credit is a dollar-for-dollar reduction in the amount of tax that must be paid. The R&D credit is complex. The amount of the credit is based on how much a taxpayer has increased its R&D expenses over a base period. Small businesses and start-up companies typically claim an alternative simplified credit. With this method, their credit is equal to 14% of the amount current-year R&D expenses exceed 50% of the average spent in the previous three years.
Small and start-up businesses also have the option of applying the credit to offset their Social Security payroll tax payments instead of their income taxes. Up to $250,000 per year in Social Security payments for up to five years can be offset with the credit. This option is available only for businesses with less than $5 million in gross receipts and with no more than five years of gross receipts.
If both the R&D credit and tax deduction are claimed, the deduction is reduced by the amount of the credit. The credit is claimed on IRS Form 6765.
see this for definitions
https://www.law.cornell.edu/cfr/text/26/1.174-2
