Congress is on the verge of a bipartisan tax deal to support businesses and families–but will it come soon enough to protect countless small R&D firms from bankruptcy?

Last year, thousands of CEOs were shocked to hear research and development (R&D) investments would be taxed before they were able to generate profit to pay these taxes. A little-known provision of the 2017 Tax Cuts and Jobs Act (TCJA) had taken effect, threatening our nation’s R&D pipeline, from lifesaving medical interventions to sustainable tech.

Having worked with hundreds of startups and R&D firms over the past five years, our organizations have unfortunately had a front row seat to the shocking impacts.

Since 1954, businesses could fully deduct R&D expenses in the first year incurred. As of 2022, businesses must amortize these expenses over five years. The result is devastating. Thousands of innovative companies are now facing bankruptcy; 35% of companies surveyed that use this deduction reported needing to borrow money to pay new taxes and 19% might go bankrupt.

Congress owes it to our nation’s innovators to right this wrong before a new tax filing season begins.