税 Relief for Working Families and Workers Act of 2024

January 24, 2024 - The House Ways and Means Committee, by a vote of 40-3, recently approved the 税 Relief for Working Families and Workers Act of 2024. The 税 framework would restore certain 2017 税 reform business provisions, as well as boost the child 税 credit. Surprisingly, the bill overwhelmingly passed through the committee in a show of bipartisan support rarely seen in a 税-focused bill. While there is still uncertainty regarding its ultimate passage, the bill sits in limbo waiting for the full House chamber to return on January 29. 

The current language of the 税 Relief for Working Families and Works Act of 2024 is subject to change as it moves through Congress, but it contains a number of 税 provisions that would significantly impact 税 filings for 2023, as well as previously filed 税 returns for 2022. 

Key Provisions of the Bill

If the bill is passed by Congress and signed into law by the President, some of the key provisions would be as follows:

Restoration of expensing for domestic research and development expenditures.

One of the most impactful changes in the proposal is the treatment of research and development expenditures. The proposal would change the date of required capitalization for domestic expenditures from dates beginning after December 31, 2021, to December 31, 2025. The required capitalization of foreign research and development expenditures would not change.

Extension of 100% bonus depreciation and increased IRC 179 deduction limitations.

The proposal would extend 100% bonus depreciation through 2025. The allowance for bonus depreciation was scheduled to be reduced to 80% for 2023 and continue to decrease by 20% for the next several years.

The IRC 179 expensing amounts were increased for years beginning in 2024 to $1.29 million with phaseout beginning with total qualifying purchases exceeding $3.2200万年.

Extension of addition of depreciation and amortization in calculation of interest expense limitation.

The deductibility of interest expense would increase for many 税payers with the reinstated inclusion of depreciation and amortization in the definition of adjusted 税able income. The change is generally effective for years beginning after December 31, 2023, 然而, 税payers can elect to apply the extension retroactively to years beginning after December 31, 2021.

Expansion of the child 税 credit.

While the majority of the 税 changes in the bill impact business 税payers, individual 税payers can be impacted by the extension/expansion of the child 税 credit through 2025 with amounts adjusted for inflation beginning in 2024.

Funding of the Bill

The government would fund the cost of some of these changes by closing the period 税payers can apply for the employee retention 税 credit (for both 2020 and 2021 claims) on January 31, 2024.  Increased enforcement levied through fines and penalties for those found violating rules for claiming the 税 credit, or engaged in outright fraud, will provide additional funding for the bill. 

The ultimate fate of the bill is not clear, but the impact on businesses could be significant. If you have any questions or concerns regarding how passage of the 税 Relief for American Families and Workers Act of 2024 may affect your or your business, 你可以 reach out to a Redpath and Company advisor here.