MasterYoda900 has it backwards. However, my CPA said software engineer salaries are only categorized as R&D before the product is launched. So this only affects new startups pre-launch... if my CPA is correct.
Your CPA might be referring to rules for R&D tax credits, which covers a much, much more narrow scope of business activities. R&D credits cannot offset the impact of the amortization rules.
> However, my CPA said software engineer salaries are only categorized as R&D before the product is launched
I wonder how this one will pan out.
Let's say you build out a landing page with a way for folks to input their email address which demonstrates interest in your product. You've released it and people can sign up.
Did it launch? You could make case it did and now you're iterating on the product from here on out. You've launched phase 1 of the product which is probing for demand.
Any software development costs related to improving the product by providing new features must be amortized. Only clear bug fixes can have costs that are expensable.
This is made extremely clear in the IRS guidance document.
