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<!doctype html><html lang="en"><head><meta charset="utf-8"><meta name="viewport" content="width=device-width,initial-scale=1"><title>Section 174A R&amp;D Catch-Up Check 2026</title><meta name="description" content="How much of your 2022-2024 domestic R&amp;D is still stranded, and which OBBBA route releases it"><style>*{box-sizing:border-box}
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<h1>Section 174A catch-up: what is still stranded, and what releases it</h1>
<p class="sub">How much of your 2022-2024 domestic R&amp;D is still stranded, and which OBBBA route releases it</p>
<label for="rd_2022">Domestic R&amp;E spend, tax year 2022 <span class="u">USD</span></label><input type="number" id="rd_2022" data-k="rd_2022" value="420000" step="any">
<label for="rd_2023">Domestic R&amp;E spend, tax year 2023 <span class="u">USD</span></label><input type="number" id="rd_2023" data-k="rd_2023" value="610000" step="any">
<label for="rd_2024">Domestic R&amp;E spend, tax year 2024 <span class="u">USD</span></label><input type="number" id="rd_2024" data-k="rd_2024" value="880000" step="any">
<label for="tax_rate">Marginal tax rate you apply to the deduction <span class="u">%</span></label><input type="number" id="tax_rate" data-k="tax_rate" value="21" step="any">
<label for="catchup_plan">Which route are you testing</label><select id="catchup_plan" data-k="catchup_plan"><option value="All in tax year 2025" selected>All in tax year 2025</option><option value="Split evenly across 2025 and 2026">Split evenly across 2025 and 2026</option><option value="Keep amortizing, elect nothing">Keep amortizing, elect nothing</option></select>
<label for="receipts_3yr_avg">Average annual gross receipts, 2022-2024 <span class="u">USD</span></label><input type="number" id="receipts_3yr_avg" data-k="receipts_3yr_avg" value="14000000" step="any">
<table><tr><th>Stranded 2022-2024 domestic balance at 2025-01-01</th><td class="v" data-o="unamortized_total">&mdash;</td><td>USD</td></tr><tr><th>Deduction released in tax year 2025</th><td class="v" data-o="deduct_2025">&mdash;</td><td>USD</td></tr><tr><th>Deduction released in tax year 2026</th><td class="v" data-o="deduct_2026">&mdash;</td><td>USD</td></tr><tr><th>Pulled into 2025 that electing nothing would leave behind</th><td class="v" data-o="accel_2025">&mdash;</td><td>USD</td></tr><tr><th>Tax cash that 2025 deduction is worth at your rate</th><td class="v" data-o="cash_2025">&mdash;</td><td>USD</td></tr><tr><th>Which route the gross-receipts test leaves open</th><td class="v" data-o="route">&mdash;</td></tr></table>
<div class="f" style="border:2px solid #111;padding:14px;margin:12px 0"><b>Every number above is free, forever, with no key.</b><br>Keep the workpaper and keep the clock: CSV export of every input and both catch-up routes for your preparer, plus repeating alarms before 2026-07-06 and your own filing date.<br><a href="https://getreadystack.com/api/buy/cl/polar_cl_3xMhNJr67GyPafB4aSgyHnDKQ76GsG6NgATcf2r0JjQ" style="display:inline-block;margin-top:8px;padding:9px 16px;background:#111;color:#fff;text-decoration:none;border-radius:6px">Get CSV export and deadline alarms &mdash; $60</a><br><small>$60 once &middot; one licence key per person or team seat &middot; Late-election relief under Treas. Reg. 301.9100-3 carries an IRS user fee of $13,900 for requests received after 2025-02-01.</small></div>
<div class="f"><b>Stranded balance at 2025-01-01</b><br>Applies the TCJA midyear convention - 2022 spend 50 percent unamortized, 2023 spend 70 percent, 2024 spend 90 percent - instead of the flat one-fifth people do in their head.</div><div class="f"><b>All-in-2025 against the two-year split</b><br>Rev. Proc. 2025-28 lets you release the balance entirely in the first tax year beginning after 2024-12-31 or ratably across 2025 and 2026. Shows both, plus what happens if you elect nothing.</div><div class="f"><b>The 31,000,000 gross-receipts gate</b><br>Tells you whether the retroactive election on amended 2022-2024 returns is open to you at all, and names the 2026-07-06 outer deadline.</div><div class="f"><b>Deduction turned into tax cash</b><br>Multiplies the released deduction by your own marginal rate so the answer is a number your bank account recognises, not a deduction.</div><div class="f"><b>CSV export of the workpaper</b><br>Paid layer: writes every input, the per-year unamortized split and both routes to a .csv you keep and hand to your preparer.</div><div class="f"><b>Deadline alarms</b><br>Paid layer: a repeating chrome.alarms reminder before 2026-07-06 and before your own return due date, so the window does not close while the file sits open.</div>
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var a = num(v.rd_2022), b = num(v.rd_2023), c = num(v.rd_2024);
var rate = num(v.tax_rate); if (rate < 0) { rate = 0; } if (rate > 60) { rate = 60; }
var gr = num(v.receipts_3yr_avg);
var plan = String(v.catchup_plan == null ? '' : v.catchup_plan);
var unam = 0.5 * a + 0.7 * b + 0.9 * c;
var keep = 0.2 * (a + b + c);
var d25, d26;
if (plan.indexOf('Split') === 0) { d25 = unam / 2; d26 = unam / 2; }
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else { d25 = unam; d26 = 0; }
var accel = d25 - keep; if (accel < 0) { accel = 0; }
var small = (gr > 0 && gr <= 31000000);
var route = small
? 'Small business: average gross receipts ' + fmt(gr) + ' clears the 31,000,000 section 448(c) test, so the retroactive election on amended 2022-2024 returns stays open until 2026-07-06 or the section 6511 refund window for that year, whichever falls first.'
: 'Above the test: average gross receipts ' + fmt(gr) + ' exceeds 31,000,000, so amended 2022-2024 returns are closed to you. The catch-up rides on the 2025 return as a section 481(a) method change under Rev. Proc. 2025-28.';
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<section data-yj="yj-facts-v1" style="max-width:920px;margin:48px auto 0;padding:0 20px;font-family:system-ui,sans-serif"><style>.yj-article p{font:400 15.5px/1.7 system-ui,sans-serif;color:#26313b;margin:0 0 12px;max-width:72ch}.yj-article h2,.yj-article h3,.yj-article h4{font:600 17px/1.35 system-ui,sans-serif;color:#1b1f24;margin:22px 0 8px}.yj-article table{border-collapse:collapse;margin:10px 0 16px;font:14px/1.45 system-ui,sans-serif}.yj-article th,.yj-article td{border:1px solid #e2e6ea;padding:6px 10px;text-align:left}.yj-article th{background:#f4f6f8}.yj-article pre{background:#0f1720;color:#e6edf3;padding:12px 14px;border-radius:8px;overflow:auto;font:13px/1.5 ui-monospace,Menlo,monospace}.yj-article code{font:13px ui-monospace,Menlo,monospace;background:#f1f3f5;padding:1px 4px;border-radius:3px}.yj-article pre code{background:none;padding:0}.yj-article ul,.yj-article ol{font:15px/1.6 system-ui,sans-serif;color:#26313b}</style><p style="font:400 13px/1.5 system-ui,sans-serif;color:#6b7680;margin:0 0 14px"><time datetime="2026-09-19">Updated 2026-09-19</time> · ReadyStack</p><script type="application/ld+json">{"@context":"https://schema.org","@type":"WebPage","dateModified":"2026-09-19","author":{"@type":"Organization","name":"ReadyStack"}}</script><h2 style="font:600 21px/1.3 system-ui,sans-serif;margin:0 0 6px;color:#1b1f24">Worked example</h2><p style="font:400 14.5px/1.5 system-ui,sans-serif;margin:0 0 16px;color:#5b6570">Real numbers from this tool, line by line.</p><div class="yj-article"><p><img src="https://getreadystack.com/img/promo/sku123057_result_card.jpg" alt="Section 174A R&amp;D Catch-Up Check 2026" loading="lazy" style="max-width:100%;border-radius:6px"></p>
<p>A US software founder with 420,000, 610,000 and 880,000 of domestic research spend across tax years 2022, 2023 and 2024 is sitting on 1,429,000 of deduction that was never taken -- and 1,047,000 of it stays off the 2025 return unless somebody makes an election before the year closes.</p>
<p>Here is where the hand estimate goes wrong. The TCJA rule that took effect for tax years beginning after 2021-12-31 made domestic research expenditures amortizable over five years, and it did so on a midyear convention. The year you spend the money you deduct 10 percent. The next four years take 20 percent each. The tail 10 percent lands in year six. Divide by five instead and the 2022 layer looks 60 percent deducted when it is 50 percent: 10 plus 20 plus 20. The 2023 layer is 30 percent deducted, not 40; the 2024 layer 10 percent, not 20.</p>
<p>Run that on the three numbers above. The 2022 layer leaves 210,000 stranded. The 2023 layer leaves 427,000. The 2024 layer leaves 792,000. Total: 1,429,000 sitting on the balance sheet on 2025-01-01, already spent, not yet deducted.</p>
<p>OBBBA, signed in July 2025, added Section 174A and restored immediate deduction of domestic research expenditures for tax years beginning after 2024-12-31. Rev. Proc. 2025-28 set out how the stranded balance comes home: deduct it entirely in that first year, or ratably across 2025 and 2026, either way as a Section 481(a) method change. Do nothing and the old schedule grinds on -- 382,000 in 2025 and 382,000 in 2026.</p>
<p>So the three routes on one screen look like this. Elect nothing: 382,000 in 2025. Take the catch-up all in 2025: 1,429,000, which is 1,047,000 more than the do-nothing baseline and worth 300,090 in tax cash at a 21 percent rate. Split it: 714,500 in 2025 and 714,500 in 2026, worth 150,045 of 2025 cash. Which one wins is a rate question and a Section 163(j) question, since Rev. Proc. 2025-28 counts the released amount as amortization for the business interest limitation.</p>
<p>There is a second door, on a timer. A small business meeting the Section 448(c) test -- average gross receipts not above 31,000,000, tested for 2025 -- may elect Section 174A retroactively for 2022, 2023 and 2024 on amended returns or AARs. The deadline is the earlier of 2026-07-06 or that year&#x27;s Section 6511 refund window, and for most 2022 calendar-year returns the refund statute closes first. Cross 31,000,000 and that door was never open; the 2025 catch-up is the only route.</p>
<p>Why not just ask a chatbot? Most models were trained while capitalization was the law, so they recite the five-year rule OBBBA replaced, apply a flat fifth, and never mention 2026-07-06.</p>
<p>What it costs to be late is a published number. If the automatic window closes and you have to ask the IRS for relief to make a late election under Treas. Reg. 301.9100-3, the user fee alone is $13,900 for requests received after 2025-02-01, before a single hour of professional time. The automatic route under Rev. Proc. 2025-28 has no user fee at all. The expensive part is never the filing. It is the date.</p>
<p>The extension is a browser popup with six inputs and six outputs. Type your three spend figures, your rate and your gross receipts, pick a route, and these numbers appear for your file instead of the example. All of it is free and unlimited, with no key and no locked result. A $60 licence adds keeping rather than knowing: a CSV of every input and all three routes for your preparer, and alarms before 2026-07-06. Your figures never leave the browser.</p></div><h2 style="font:600 21px/1.3 system-ui,sans-serif;margin:34px 0 6px;color:#1b1f24">Questions people ask</h2><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">What does the Section 174A R&amp;D Catch-Up Check actually do?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">It takes your domestic research spend for tax years 2022, 2023 and 2024 and computes how much of it is still unamortized on 2025-01-01 under the TCJA five-year schedule with the midyear convention. It then shows what Section 174A releases if you deduct the balance all in 2025, split it across 2025 and 2026, or elect nothing at all.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">Who is this built for?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">US software, hardware and engineering companies that capitalized research costs on their 2022, 2023 and 2024 federal returns, and the bookkeepers and controllers preparing those clients&#x27; 2025 and 2026 filings. It is aimed at the firm small enough that nobody has run a formal method-change study but large enough that the stranded balance is six or seven figures.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">Why will a chatbot or a generic tax calculator not answer this?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">Most models were trained while Section 174 capitalization was the law and still answer with the five-year amortization rule that OBBBA replaced in July 2025. They also apply a flat one-fifth per year and miss the midyear convention, which is why a hand estimate of the 2022 layer comes out at forty percent instead of fifty percent unamortized.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">What is free and what does the key unlock?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">Every calculation is free, unlimited, with no key, no watermark and no locked result: the stranded balance, both catch-up routes, the do-nothing baseline, the cash value and the gross-receipts verdict. The 60 dollar key adds a different axis entirely, ownership and repetition: CSV export of the workpaper, and repeating alarms before the 2026-07-06 deadline.</p></details><details style="border-bottom:1px solid #e6e9ed;padding:10px 0"><summary style="cursor:pointer;font:600 15px/1.4 system-ui,sans-serif;color:#1b1f24">What would this cost handled the other way?</summary><p style="margin:8px 0 2px;font:400 14.5px/1.6 system-ui,sans-serif;color:#33404b">If the automatic window closes and you have to ask the IRS for late-election relief under Treasury Regulation 301.9100-3, the user fee alone is 13,900 dollars for requests received after 2025-02-01, before any CPA time. The automatic route under Rev. Proc. 2025-28 carries no IRS user fee, which is exactly why the date matters more than the fee.</p></details><script type="application/ld+json" data-yj="yj-faq-ld">{"@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{"@type": "Question", "name": "What does the Section 174A R&D Catch-Up Check actually do?", "acceptedAnswer": {"@type": "Answer", "text": "It takes your domestic research spend for tax years 2022, 2023 and 2024 and computes how much of it is still unamortized on 2025-01-01 under the TCJA five-year schedule with the midyear convention. 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Answers land on this page and, if you left an email, in your inbox.";f.question.value="";}).catch(function(){m.style.color="#a8551f";m.textContent="Could not send. Please try again in a minute.";});return false;}</script></div></section><section class="yj-related" style="max-width:920px;margin:56px auto 40px;padding:0 20px"><h2 style="font:600 21px/1.3 system-ui,sans-serif;margin:0 0 6px;color:#1b1f24">Same job, next tool</h2><p style="font:400 14.5px/1.5 system-ui,sans-serif;margin:0 0 20px;color:#5b6570">Free in the browser. 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