Open-Source Tax Credit Would Better Compensate Tech Developers
Columnist Andrew Leahey says a tax credit for open-source software would encourage developers to invest more resources into improving the quality of such projects.
Open-source software is quite common in corporate and personal devices, and is widely used in many government applications. It is collaboratively developed, with freely available source code, and underpins most technology in use. A 2024 Harvard study valued it at $8.8 trillion.
A software project may be initially undertaken by a single developer as a hobbyist project, but writing a piece of code is just the beginning. Maintenance and security updates require long-term commitments, often by an entire community of developers.
There is insufficient incentive for additional developers to get involved to maintain a project. Allowing skilled developers to volunteer on open-source projects and deduct related expenses, including a portion of their time dedicated to these projects, would recognize their invaluable work and encourage broader participation and, thereby, oversight.
The idea of providing an open-source tax credit for developers with financial outlays for things such as software and equipment isn’t new. Such a credit, which has been proposed at the state level, conceivably would further their contributions to free and open-source projects.
