Tax policy shifts: What CFOs need to know to stay ahead

Tax planning for 2026 is coming into focus as guidance and litigation begin to fall into place. 

Bloomberg’s 2026 Tax Policy Outlook outlines how recent tax changes are moving into an implementation phase, with full expensing provisions reinstated, adjustments underway to the corporate minimum tax and key elements of the global minimum tax framework already revised.

At the same time, provisions tied to capital investment, corporate minimum taxes and international coordination continue to take shape as the IRS issues guidance and courts address unresolved disputes.

Here are seven CFO-centric takeaways from the report:

 1. Bonus depreciation and targeted expensing are reinstated

The tax law permanently reinstates bonus depreciation, allowing upfront deductions for certain capital assets rather than spreading those deductions over time. It also provides 100% bonus depreciation for qualified manufacturing facilities placed in service before Jan. 1, 2031, expanding incentives tied to domestic production.

The report notes that additional IRS guidance is still needed to clarify which properties qualify under these provisions, with practitioners citing uncertainty around eligibility and scope.

2. The corporate alternative minimum tax is being narrowed through guidance

Treasury has taken steps to reduce the reach of the 15% corporate alternative minimum tax, including exemptions for insurance, shipping and utility companies and the exclusion of unrealized cryptocurrency gains. These changes follow criticism that earlier proposed rules were overly complex.

Further guidance is expected, particularly for companies with large research and development spending. The report characterizes the changes as adjustments to how the tax applies, rather than a repeal of the minimum tax itself.

3. IRS staffing and leadership challenges continue

The report states that the IRS workforce declined by about 25%, to roughly 75,000 employees, following early retirement and resignation offers in 2025. The agency continues to face turnover, funding uncertainty beyond January, a legal battle with President Donald Trump and the possibility of another government shutdown early in the filing season.

These conditions are cited as factors that could influence enforcement capacity, the pace of guidance issuance and the speed at which cases are resolved in 2026.

4. Large transfer pricing disputes remain unresolved

Several multibillion-dollar transfer pricing cases, including disputes involving 3M, Meta, Airbnb and Coca-Cola, are identified as among the most significant litigation matters continuing into 2026. The report highlights these cases by dollar magnitude.

Recent court decisions have focused closely on valuation methodologies and the assumptions underlying intercompany pricing, shaping how similar disputes are evaluated even as outcomes remain pending.

5. U.S. companies are exempt from key elements of the global minimum tax

International negotiators agreed to exempt U.S. companies from core provisions of the Organisation for Economic Co-operation and Development’s global minimum tax, establishing a side-by-side system that allows U.S. tax rules to operate alongside the international framework. The agreement includes safe harbors tied to eligible tax regimes.

The report also notes that transitional country-by-country reporting relief has been extended through 2027, alongside the introduction of an effective tax rate safe harbor intended to simplify compliance.

6. Expanded qualified small business stock rules influence transaction structuring

The tax law expanded the qualified small business stock gain exclusion, a provision commonly used in venture-backed investments. The report describes the expansion as having immediate implications for how companies assess eligibility.

Tax professionals cited in the report say the change is already influencing how transactions are structured, particularly in the mergers and acquisitions space. 

 7. Deductions for overtime and tipped income move toward implementation

Deductions for some overtime and tipped income take effect in tax year 2025, increasing the urgency of guidance ahead of the 2026 filing season. The Treasury has issued transition guidance for overtime and proposed rules for tipped income.

The report notes that practitioners continue to seek clarity on what qualifies as overtime and tips under the new provisions, signaling that further interpretation will be required.    

The following is a guest post from Ian Boccaccio, principal and income tax practice leader at Ryan. Opinions are the author’s own.

The One Big Beautiful Bill Act has delivered meaningful new opportunities for businesses, including 100% bonus depreciation, the restoration of immediate expensing for domestic R&D and permanent credit transferability. For companies that can act quickly and precisely, the potential for tax savings and improved cash flow is substantial. But the same provisions that create those opportunities are generating a new layer of operational complexity that many corporate tax departments are not yet equipped to handle.

Teams that cannot model the full scope of OBBBA's impact will find themselves not just stretched thin but at risk of missing benefits that require deliberate action to capture.

What is at stake

Before OBBBA, domestic R&D costs were amortized over five years, bonus depreciation was phasing down and credit transferability remained an evolving planning tool. OBBBA resets several of those conditions. Bonus depreciation returns to 100% for qualifying property placed in service after January 19, 2025. Section 174A restores full immediate expensing for domestic research and experimental expenditures. Credit transferability is now a permanent fixture, and buying discounted tax credits has become an annual exercise for most U.S. corporates. Companies purchasing $100 million in credits can realize $5 million to $9 million in cash savings.

At the same time, the bill introduces new planning tensions. Additional interest expense deductions available under OBBBA could create a Base Erosion and Anti-Abuse Tax liability for certain multinationals. Bonus depreciation can reduce taxable income in ways that limit a taxpayer's ability to benefit from the Foreign-Derived Intangible Income deduction. These interactions need to be modeled before returns are filed.

The state conformity problem

Federal changes do not automatically flow through to state returns, and OBBBA is creating significant state-level turbulence across three core areas: GILTI, 174A and depreciation.

Roughly half of states conform to the Internal Revenue Code on a rolling basis; the other half conform to an older version or selectively adopt provisions. OBBBA was enacted just as most state legislative sessions ended, meaning a majority of state-level responses will not materialize until well into 2026. This pattern is familiar: After TCJA, state adoption and decoupling dragged on for up to nine years, with California acting as recently as last June, one month before OBBBA was enacted. Tax preparation software and compliance matrices often lag those changes, so teams cannot assume their systems will capture the current state of the law.

States have also demonstrated a willingness to interpret federal IRC provisions in ways that directly contradict federal positions. Colorado, for example, has, through case law, disconnected from federal LLC classification for purposes of the state's 80/20 test for excluding domestic corporations with significant foreign factor representation. New Jersey case law previously held that NOL carryovers could be time-barred from change before legislation reversed that position. These kinds of independent state interpretations compound the complexity of an already unsettled conformity landscape.

On GILTI, approximately 12 states currently tax some portion of this income, and that number is growing, with Illinois and Minnesota among recent additions and Massachusetts actively considering legislation. The renaming of GILTI to Net CFC Tested Income under the new law creates a technical problem for states that referenced "GILTI" by name in their statutes. Some states allow the IRC Section 250 deduction related to GILTI, and those states will need to update their statutory language to avoid potential interpretation problems. Illinois has already updated its statute to account for the naming change.

On 174A, several states have already decoupled from the immediate expensing provision, citing revenue shortfalls. States that want to preserve maximum capitalization of research costs need to reference 174A specifically in their decoupling provisions without disturbing treatment under the existing Section 174. Conflating the two creates compliance risk. The less favorable federal treatment of foreign research costs, amortized over 15 years rather than immediately expensed, also creates a constitutional tension at the state level under Kraft, which prohibits states from discriminating against foreign commerce.

On depreciation, many states cannot afford to be as generous as the federal government in allowing accelerated deductions. Even so, even in states that have decoupled from existing bonus depreciation statutes, taxpayers may still have a viable path to claiming accelerated depreciation under IRC Section 168(n), since it is an entirely new section under the code rather than an amendment to existing rules. Whether a state's decoupling language captures a newly created section is a question teams should be asking now. Iowa and Oklahoma have administratively moved to include Net CFC Tested Income in their state tax base following the naming change, adding further complexity for multinationals with filing obligations in those states.

What tax teams should do now

Staying abreast of state law changes and ensuring those changes flow through the return is the most important discipline tax teams can adopt right now. That requires a manual review of state-by-state conformity status rather than reliance on software updates alone.

On GILTI and Net CFC Tested Income, companies that have not yet challenged states' ability to tax this income should examine the incremental state tax exposure under the OBBBA version of the provision and consider filing claims in affected jurisdictions. The wave of states moving to tax this income is growing, and companies that act proactively rather than waiting for an audit will be better positioned. Similarly, companies should consider taking protective positions on original returns challenging states' ability to apply the less favorable federal treatment of foreign research costs under Section 174, given the constitutional constraints under Kraft.

For companies with remaining R&D amortization balances, the acceleration election available in 2025 and 2026 is time-sensitive. Weighing that option against the amended return path requires a case-by-case analysis that accounts for filing costs, IRS processing delays and the cascading effect on state returns.

Setting clear expectations with the C-suite matters as much as the technical work. Finance leaders should understand that OBBBA's benefits are not automatic and that the window to act on several provisions is narrowing.

OBBBA represents a genuine opportunity for businesses willing to engage with its complexity. The most time-sensitive provisions are those tied to bonus depreciation elections, the 174A acceleration window and the Section 168(n) question at the state level. The companies that capture the most value will be those that treat OBBBA as an ongoing planning discipline, tracking state developments in real time and modeling provision interactions carefully.

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The following is a guest post from Dan Boyd, VP of Sales at CSSI Services. Opinions are the author’s own.

If April 15 came and went with a tax bill that stung, here’s something worth knowing before you move on: for many companies, that number isn’t final. In most cases, businesses can amend prior year returns going back three years to capture federal tax credits they didn’t claim the first time around. If your company is investing in innovation and hasn’t fully explored the R&D tax credit, there’s a real possibility you’re owed money you haven’t collected.

That’s not a small thing. The R&D tax credit is a dollar-for-dollar reduction in federal tax liability, not simply a deduction against income. For companies with meaningful qualifying activity, it can represent a significant and recurring offset against what they owe each year. And yet, a substantial number of eligible businesses either never claim it or claim far less than they’re entitled to.

Your Work Probably Qualifies. Most CFOs Don’t Know That.

The R&D tax credit has a reputation problem. Finance leaders tend to associate it with pharmaceutical research, aerospace engineering, or technology companies with formal R&D departments and dedicated budgets. That association is understandable, but it leaves a lot of money on the table.

The federal credit applies to any company engaged in qualified research activity, which the IRS defines as work involving the development or improvement of a product, process, software, or technique where genuine technical uncertainty exists and a process of experimentation is used to resolve it. That definition is broader than most people expect, capturing companies across manufacturing, engineering, food and beverage, life sciences, clean technology, software, and many other industries. If your team is solving technical problems, improving processes, or developing something new, there’s a good chance some of that work qualifies.

The credit itself is a dollar-for-dollar reduction in your federal tax liability, not a deduction, but a direct offset against what you owe. For companies with meaningful qualifying activity, that can represent a significant and recurring reduction year after year.

The Gap Between Qualifying and Claiming

Understanding that you likely qualify is only part of the equation. The more pressing issue for most companies is that qualifying and claiming the credit are two different things. Most generalist tax advisors don’t specialize in R&D credit identification and documentation. This means eligible activities go unrecognized and unclaimed, not because the credit doesn’t apply, but because no one built the case for it.

Properly claiming the R&D credit requires a documented study that identifies qualifying activities, ties them to the relevant wage, supply, and contractor expenditures, and creates a defensible record that holds up to IRS review. Without that foundation, companies either skip the credit entirely or claim a fraction of what they’re actually entitled to.

Getting Ahead of Next Year

Companies that address this now rather than waiting until next April are in a fundamentally better position. A study conducted during the year produces stronger documentation, gives your tax team more to work with, and allows credits to factor into estimated tax payments throughout the year, improving cash flow well before the next filing deadline arrives.

If this past tax season left you looking for answers, the most productive next step is finding out whether your company’s everyday innovation is generating credits you haven’t captured. That starts with a straightforward analysis of your qualifying research expenses, the wages, supplies, and contractor costs tied to work your team is already doing.

The R&D tax credit has been part of the federal tax code since 1981. It isn’t new, and it isn’t going anywhere. What changes is whether your company is positioned to benefit from it. If your tax bill just hurt, that’s worth finding out sooner rather than later.

The following is a guest post from Michael Geller, CPA and tax partner at Gursey Schneider. Opinions are the author’s own.

In 2025, the One Big Beautiful Bill Act made the qualified business income deduction permanent, solidifying a significant tax savings opportunity. First introduced in 2017 as part of the Tax Cuts and Jobs Act, QBID allows taxpayers, other than corporations, an opportunity to take an additional deduction equal to 20% of qualified business income. A taxpayer with $1 million in qualified business income could thereby reduce their taxable income by as much as $200,000.

Sole proprietorships, partners and S corporation shareholders are the taxpayers who may benefit the most from QBID. For deduction purposes, businesses are put in one of two classifications: specified service trades or businesses and qualified trades/businesses. SSTBs generally include professional service businesses such as law firms, accounting firms, dentistry, etc. Any business that is not considered an SSTB is considered a qualified trade or business.

It is common for qualified trades or businesses to generate income high enough to trigger QBID limits, which can become a roadblock to maximizing the benefits of the deduction. One such limitation can be insufficient W-2 wages, though there are ways to overcome this issue. While there are many nuances to QBID, a solid understanding of the mechanics of the deduction and practical strategies to overcome challenges can help ensure it is utilized correctly and to its full potential, significant tax savings.

Understanding QBID limits 

As an overview of QBID, we’ll look first at the basic calculation. QBID is the lesser of:

1. 20% of the taxpayer’s QBI from a qualified trade/business plus 20% of qualified REIT dividends and qualified PTP income
2. 20% of taxable income before QBID less net capital gain

With regard to W-2 wage and basis limitations, QBID is limited to the greater of:

1. 50% of W-2 wages paid with respect to the qualified trade or business
2. 25% of the W-2 wages plus 2.5% of the cost basis of certain fixed assets

When performing the basic calculation, taxpayers may feel elated at the prospect of deducting 20% of their qualified business income. Many are then caught off guard when they learn their business doesn’t have enough payroll expenses to unlock the full benefit. 

For instance, with $1 million in qualified business income, a taxpayer may expect to receive a $200,000 QBID deduction. However, if the qualified business had only $100,000 of W-2 wages, this would unfortunately limit QBID to $50,000 ($100,000 x 50%). This would leave $150,000 of deductions on the table.

Practical solutions to QBID limits 

For S Corporations, one solution is to double-check if owner/shareholder wages are up to date. S corporation owners are required to take a fair wage anyway, so this can be a win-win: You meet IRS requirements and boost your QBID allowance at the same time.

When dealing with a partnership, owners cannot receive W-2 wages. These payments are typically characterized as guaranteed payments, which do not count towards the QBID allowance. A solution here would be to insert another regarded partnership (holding company) between the partners and the operating partnership. This allows the partners to receive W-2s from the underlying operating partnership. If this strategy is pursued, paying an arm’s length or market salary is important. 

These strategies do not involve changing the total income one will receive. A taxpayer’s income is recharacterized (K-1 income to W-2 wages) and enables the taxpayer to enjoy a larger deduction. This is an efficient process to reduce overall taxes.

For taxpayers above the income thresholds, QBID can be a powerful tool to cut down on taxes. Making the deduction permanent creates a planning opportunity that should not be ignored. With the right strategies in place, it is possible to maximize the deduction and lock in significant, recurring savings.

The influence of corporate tax leaders is at an all-time high, according to new research, with 90% saying they’re regularly invited to weigh in on business decisions and that their recommendations carry significant weight.

The types of discussions they participate in include core strategic priorities, such as business resilience strategies (for example, preserving revenue or preparing for economic volatility). About two-thirds (63%) of the 300 senior tax leaders surveyed by BDO said they were “very involved” in that area.

Additionally, 60% said the same about strategic transactions such as M&A, divestitures, carveouts and restructurings.

As with so many business trends today, economic factors are playing a key role in this one’s continued development. “CFOs’ growth strategies for 2025 initially included plans for M&A, product and service pivots and expansion initiatives, but tax and trade policy uncertainty in the first half of the year complicated these strategies,” BDO said in its survey report.

Now, in the wake of the new reconciliation tax bill known as the One Big Beautiful Bill Act, companies are analyzing the implications of tax policy changes.

Top areas of concern include U.S. tariffs, Inflation Reduction Act clean energy credits, new accounting rules (such as Accounting Standards Update 2023-09), transfer pricing audit activity and changes to the Tax Cuts and Jobs Act enacted as part of the One Big Beautiful Bill Act.

In response, according to the report, CFOs are fostering greater collaboration with tax teams. “By involving tax earlier in the decision-making process,” BDO wrote, “CFOs help translate complex tax implications into clear business impacts.”

Additionally, organizations that do so are better positioned to identify and mitigate tax risk and seize emerging opportunities, the report said.

CFOs represented 23% of the survey participants, and their views on how finance collaborates with tax were quite aligned with those of non-CFO tax leaders.

For example, 87% of finance chiefs and 92% of the others agreed that “CFOs bring tax leaders to the table for important conversations about business strategy.” And 94% of finance chiefs and 89% of the others agreed that “the CFO and tax leader have a defined, shared vision for tax’s role in the organization.”

At the same, BDO sounded an alarm relating to the resources needed to cope with the current tax challenges. “Technology and talent gaps remain for too many tax teams, and this lack of resources may have a considerable impact in a year when tax complexity will challenge the C-Suite,” the report advised. 

The following is a guest post from Michael Thompson, principal, R&E Tax Credits at Ryan. Opinions are the author’s own.

The One Big Beautiful Bill Act's restoration of immediate expensing for domestic R&D expenditures on July 4, 2025, after only three short years of forced capitalization and amortization, represents more than a return to previous tax rules. It is definitive action reinforcing clear legislative intention to incentivize businesses of all sizes to make those incremental investments here at home, which will ensure the country is poised to continue its place as a technology leader in an ever-expanding global economy. 

More than that, the prompt reinstatement of this incentive breathes renewed life into discussions created by the original changes to Internal Revenue Code Section 174 regarding what constitutes research and development for tax purposes. It will hopefully continue to close a critical gap in business understanding: R&D qualification goes well beyond white lab coat and patent-level research and development. To properly understand the business tax implications, we first must establish the impact of the OBBB on R&D expenditures.

More than one big beautiful opportunity

Section 174A restores immediate expensing for domestic R&D activities, starting with tax years after Dec. 31, 2024, while foreign R&D expenditures must continue to be amortized over 15 years. This returns taxpayers a compelling incentive for U.S.-based R&D activities.

Additionally, all businesses can choose to accelerate the deduction of remaining unamortized domestic R&D expenses from 2022 to 2024, either entirely in the first tax year beginning after Dec. 31, 2024, or ratably over the following two years. This flexibility helps optimize the timing of deductions based on tax position.

For small businesses with average annual gross receipts under $31 million over the prior three tax periods, the OBBB provides exceptional retroactive relief. These companies may elect to recapture unamortized R&D costs dating back to tax years after Dec. 31, 2021, by amendment, but must do so in a relatively short period.

With these changes to domestic R&D expensing in the OBBB, companies should carefully review the variety of options available to them, considering the impact on net operating losses, tax credit utilization, and potential carry-forward situations. While Section 174A restores immediate expensing as the default treatment, businesses retain flexibility to elect capitalization and amortization over periods of 60 months or 10 years if that better aligns with their tax planning strategies.

The hidden qualification reality and tax credit eligibility

After spending over two decades in R&D tax consulting, I’ve noticed one misconception that still pervades just about every introductory conversation on the subject. When business leaders hear research and development, they immediately think of things like lab coats, test tubes, patents and artificially intelligent humanoid robots. And, while developments from activities incorporating these elements very often indicate the existence of tax-related R&D activities, one thing the change to required capitalization and amortization under Internal Revenue Code Section 174 in 2022 should have taught us is that they represent just the tip of the iceberg of evidence that can support the presence of efforts qualifying as R&D under tax law.   

For the past 44 years, the credit for increasing research activities in Section 41 of the Internal Revenue Code has provided a dollar-for-dollar reduction in tax derived directly from some of the very same types of expenses the law change in 2022 required to be capitalized and amortized.

Qualifying R&D tax credit activities encompass organized efforts to develop products, processes, formulas, techniques, software or inventions that are new to the company or represent improvements over previous methods employed. Critically, businesses are not required to survey their global competitive landscape to determine uniqueness or novelty — the standard focuses on internal innovation and improvement efforts.

Additionally, where it can be demonstrated that these businesses employed a process for evaluating alternative methods or designs to overcome the inherent technological challenges faced during the development of these items, the wages, supply costs, contractor payments and cloud computing expenditures incurred to do so are likely credit eligible.

Software development: The universal gateway

For example, Section 174A explicitly treats any amount paid or incurred for software development as a research and experimental expenditure. Because virtually every modern business operates like a software company in today’s digitized environment, this is particularly important — especially when you consider the scope of qualifying software activities often includes internal-use software development, back-office system improvements, the creation or improvement of warehouse management software, the development of customer-facing applications, database enhancements and designing process automation tools and business intelligence systems.

Even website-related development may qualify if, for example, it enhances inventory management or customer relationship systems or involves solving technical problems through a structured approach. It does not take much to recognize these very same types of development activities as also potentially credit eligible, and to provide not only more than renewed deductions to decrease taxable income, but also a head start on the identification of credits to attack any remaining tax due directly.

In addition to traditional software development, AI development and implementation create significant R&D opportunities as companies design solutions which enhance or improve the efficiency, reliability or functionality of existing systems. As AI capabilities advance, activities that previously required time-consuming manual input could be accomplished in a fraction of the time. Arguably, this raises the interesting question of how tax credit qualifications could change once AI-driven R&D becomes a more viable alternative to a human-driven approach, but for the time being, strategic timing favors companies that can maximize current R&D benefits while developing AI capabilities that require substantial human involvement.

Industries that should pay attention

It is not just software companies that should leverage the knowledge gained from previously required capitalization and amortization changes by the OBBB. Manufacturers improving products or related production processes, food development and packaging companies, retail businesses optimizing warehouse logistics equipment and design-build and value-add construction and engineering companies, amongst many others, should be reevaluating day-to-day achievements to determine whether they represent potential qualifying R&D activities.

The combination of the restoration of immediate expensing and retroactive relief provided to small businesses in the OBBB is both an exciting and overdue change to the tax code. But, companies should not stop there and instead use the knowledge gained over the past three years regarding the breadth of R&D as the tax code defines it and employ the same to claim credits for those activities that once caused such consternation. 

While opinions on the One Big Beautiful Bill Act are mixed, a recent survey indicates that a plurality of CFOs expect their companies to benefit from it.

So said 44% of the 233 finance chiefs who participated in Grant Thornton’s fourth-quarter survey, compared with only 18% who believed the law would harm their financial position.

According to the survey report, companies are well-prepared to take advantage of OBBBA’s domestic opportunities, such as the restored 100% bonus depreciation, the reinstated immediate expensing for R&D costs and new rules for interest-expense deductions that make it easier for capital-intensive businesses to deduct interest.

The prospects for such tax savings are likely one reason why many companies are planning for heightened strategic spending in the coming year, the report noted. For instance, 51% of the survey participants said they expect operations expenses to increase, up from 35% who said so in Grant Thornton’s third-quarter survey.

Also, the portion who expect to cut costs on long-term strategic initiatives retrenched to 28%, down from 36% the previous quarter.

Further, the percentage of CFOs citing cash and liquidity as a top three area of focus fell sharply, from 45% in the third quarter to 30% in Q4. The same was true for cost optimization, which retreated from 48% to 37%.

Despite CFOs’ generally positive view of the OBBBA, significant concerns remain around the implementation of the law’s business tax provisions. Leading the list of worries were understanding eligibility and compliance requirements and adjusting tax-planning strategies for 2025 and beyond.

According to the report, though, company leaders may not be fully aware of everything the OBBBA offers.

For one, they may be missing out on opportunities to use provisions of the law to lower their international tax exposure, including reforms of GILTI, FDII and BEAT rules, said David Sites, national managing partner for Grant Thornton’s Washington National Tax office and the firm’s International Tax Solutions practice.

There also may be overlooked risks related to state taxes, Grant Thornton wrote. For instance, there may be increased state audit activity, as states are hiring some IRS employees who lost their jobs amid last year’s workforce reductions in a bid to rebuild their tax-enforcement ranks, “which have been understaffed for several years.”

“Companies shouldn’t underestimate the potential risks of lack of conformity across their state tax profile,” said Dana Lance, national tax managing partner for Grant Thornton Advisors.