If you spent $100M on developer salaries in FY2022, you'd create an amortization for that over the next 5 years.
And then in FY2023... even if you had fired your entire software department... you'd still get to claim that year's portion of that previously created amortization.
IANAL but have filed corporate taxes many times.
but when keeping a job position (not necessary the same person tho) through overlapping writeoffs it will lead to a consistent 100% writeoff
not doing so can lead to spkies of little writeoff when increasing company size and the opposite when shrinking it. This would make new hires on a limited budged harder and in turn should motivate more long term planing when it comes to head count and that might lead to less head count fluctuations maybe
if I understand it correctly it means the cost of this year would be written of over 5 year each year 20%, but if you keep your employees it means in the second year you have 20% write off from that year and 20% of the previous years and so one, so 5 years in still 100% write off every year
I wonder if that would motivate companies to have a more constant number of employees or more precise a similar income bill every year.
Through it would definitely mean if you had considered layoffs this year is the year to go.