Why this matters now for fleets and owner‑operators
With filing season underway for calendar‑year businesses, the IRS’s Revenue Procedure 2025‑28 changes how companies can treat research and development costs—opening the door to immediate deductions for U.S.‑based R&D and refund opportunities for prior years. Trucking businesses that invest in in‑house software, telematics, safety tech, alternative‑fuel retrofits, or aerodynamic prototypes should reassess their 2024 and 2025 returns to capture cash flow and reduce estimated taxes.
What changed: Section 174A vs. old Section 174
Beginning with tax years starting after December 31, 2024, new Section 174A lets taxpayers immediately deduct domestic research or experimental expenditures—or elect to capitalize and amortize them over at least 60 months. Foreign research remains under Section 174 and must be amortized over 15 years. Software development costs are explicitly within scope.
Small‑business retroactive relief—who qualifies
The IRS created a special “small business taxpayer” pathway to apply the new rules retroactively to 2022–2024. To qualify, a business must meet the Section 448(c) gross‑receipts test for its first tax year beginning after December 31, 2024, and cannot be a tax shelter. For 2025 tax years, the inflation‑adjusted threshold is $31,000,000 in average annual gross receipts. Qualifying fleets and owner‑operators can either deduct prior domestic R&D in the year originally incurred or elect 60‑month amortization for those years.
Deadlines you can’t miss
- November 15, 2025 (already passed): If you timely filed an original 2024 return on or before this date and deducted domestic R&D, the IRS deems you to have made the small‑business election—provided you meet the other requirements.
- Six‑month superseding window: For many 2024 filers who submitted returns before September 15, 2025 and didn’t request an extension, the IRS granted an automatic six‑month period to file a superseding return solely to use these elections; write “REVENUE PROCEDURE 2025‑28” at the top of the superseding return.
- July 6, 2026: Final deadline to make the retroactive small‑business elections or late Section 280C(c)(2) research‑credit elections on amended returns/AARs for 2022–2024. Mark this date now.
Credit coordination: 280C options
The guidance lets eligible small businesses make late or revoked Section 280C(c)(2) elections for prior years—either reducing the credit to preserve deductions or vice‑versa. For carriers that routinely claim the research credit (e.g., for routing algorithms, TMS or ELD software development), modeling the deduction‑vs‑credit trade‑off can increase net benefits.
A nuance that helps with interest limits
When recovering the remaining unamortized domestic R&E costs from 2022–2024, the IRS describes the options as “amortizing the remaining unamortized amount” either all in the first tax year after December 31, 2024 or ratably over two years. That “amortization” label matters because of changes to the Section 163(j) adjusted taxable income rules—potentially improving interest‑limit computations for leveraged fleets.
What “counts” as R&D in trucking?
- Developing or significantly enhancing dispatch, pricing, maintenance or telematics analytics software.
- Designing prototypes for aero fairings, trailer skirts, APUs, battery‑electric or hydrogen components, or alternative fuel conversions.
- Testing safety systems (ADAS integration, sensor fusion) or fuel‑efficiency innovations.
Qualified activities must aim to eliminate technical uncertainty via a process of experimentation; documentation is critical. Your facts and records drive eligibility.
Action plan for fleets and owner‑operators
- Inventory 2022–2025 R&D costs (wages, supplies, contractor costs, cloud or dev‑ops tied to software builds).
- Determine small‑business status for 2025 and confirm you’re not a tax shelter (watch the “syndicate” rule for partnerships/S corps with significant losses).
- Model options: immediate 174A deduction vs. 60‑month amortization; coordinate with the research credit using late/revoked 280C(c)(2) elections.
- If eligible, use the six‑month superseding‑return relief for 2024 and label as instructed; otherwise prepare AARs/amended returns before July 6, 2026.
- Tighten documentation: project charters, sprint logs, test results, BOMs, and time‑tracking to substantiate both deductions and credits.
Bottom line
Rev. Proc. 2025‑28 gives trucking companies a clearer, faster path to cash by restoring current deductions for domestic R&D and offering retroactive relief to smaller operators. If you wrote custom software, engineered fuel‑saving gear, or piloted zero‑emission tech, there’s a real chance to lower 2025 taxes and recover prior‑year cash—provided you act before the July 6, 2026 deadline.
Sources Consulted: Wiss Insights; IRS Internal Revenue Bulletin; Cherry Bekaert Tax Alert.
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This article was prepared exclusively for truckstopinsider.com. For professional tax advice, consult a qualified professional.
