The CREATE JOBS Act makes three major changes to U.S. tax law to benefit businesses. First, it allows businesses to immediately deduct the full cost of investments in equipment and other qualified property when purchased, rather than spreading deductions over many years through depreciation. Second, it introduces a "neutral cost recovery" adjustment for real estate (residential rental and non-residential properties) that adjusts depreciation deductions based on inflation and GDP changes, allowing businesses to take additional deductions over time. Third, it lets companies immediately expense research and development costs rather than spreading them out over five years or longer. These provisions apply to businesses of all sizes, with particular benefits to startups, manufacturers, and research-focused companies. The full expensing for equipment takes effect retroactively as if it were enacted in 2017, while the research and development changes apply to expenses paid after December 31, 2021. The bill includes no direct federal spending but reduces government tax revenue by allowing faster business deductions.
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