Notice 2023-63: IRS Guidance on SRE Amortization under Section 174 Explained

calendar iconSeptember 27, 2023

Stay Connected

Cherry Bekaert The Tax Beat Google Podcasts Cherry Bekaert The Tax Beat Spotify Podcasts Cherry Bekaert Tax Beat Podcasts

On September 8, the Internal Revenue Service (IRS) released Notice 2023-63, providing much anticipated guidance on the application of Section 174. The Notice addresses key issues for handling specified research or experimental (SRE) expenditures that are capitalized and amortized in accordance with the Tax Cuts and Jobs Act (TCJA) changes to Section 174.  Taxpayers can apply the rules of Notice 2023-63 to tax years ending after September 8, 2023, or apply these rules to an earlier tax year beginning after December 31, 2021.

Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director are joined by Tax Credit and Incentive Advisory Partners, Martin Karamon and Ron Wainwright, to discuss Notice 2023-63 and how this interim guidance clarifies certain questions about the application of Section 174.

Listen to learn more about:

  • 05:03 – Section 174 background
  • 07:54 – Who should pay attention to Notice 2023-63
  • 12:00 – Key terms in Notice 2023-63
  • 15:40 – What Notice 2023-63 says about funded research
  • 18:05 – Guidance on software development definition and activities
  • 21:01 – Effective dates and open questions under Notice 2023-63

Related Guidance

View All Podcasts from this Series

Questions? Contact Us