House Passes Tax Extenders Bill – Impending Senate Vote

The house recently passed the Tax Extenders Bill, reviving several tax breaks, including the enhanced Child Tax Credit, incentives for economic growth, improvements in interest expense, and more. The measure was approved by a vote of 357 to 70, now heads to the Senate floor which is impending potential amendments.

The Tax Relief for American Families and Workers Act of 2024 encompasses a comprehensive range of provisions designed to offer relief and assistance to taxpayers. The measure, which was recently approved by the House with a vote of 357 to 70 now heads to the Senate floor which is impending potential amendments and a final vote to be signed into law.

Among its key features noted in the bill, are a number of tax breaks, including the enhanced Child Tax Credit, the ability to fully deduct research and development expenses in the first year, changes to bonus depreciation, disaster tax relief, improvements in the Low-Income Housing Tax Credit, interest expenses and more.

Income documents and information should include:

• Expanded Tax Credits: The bill includes provisions to expand existing tax credits aimed at supporting families, such as the Child Tax Credit and Earned Income Tax Credit. These expansions are poised to provide financial relief to millions of families.
• Extension of Deduction: The bill extends the deduction for research and experimental expenditures allowed under Section 174. This deduction allows businesses to deduct the costs associated with qualified research activities, including wages, supplies, and contract research expenses.
  • It reinstates domestic R&D expensing retroactive to 2022 and would remain in effect for tax years beginning before January 1, 2026. Foreign research costs would continue to be amortized over 15 years during this period.
• In addition to the reinstatement of Section 174 deductibility, this bill would also extend 100% bonus depreciation and increase Section 179 limitations to adjust for inflation.
• Extension of Enhanced Limits: The tax extenders bill may include provisions to extend enhanced Section 179 limits. These enhanced limits allow businesses to deduct a larger portion of the cost of qualifying assets immediately, rather than depreciating them over time. Extending these limits provides businesses with continued access to valuable tax incentives for investing in equipment and technology. The bill could also expand the types of expenses that qualify for Section 179 deductions. This expansion may include additional categories of assets or higher thresholds for qualifying expenses, allowing businesses to deduct a broader range of investments from their taxable income.
• Targeted Relief for Workers: Recognizing the contributions of American workers, the legislation introduces measures to provide targeted tax relief for individuals in the workforce. This includes provisions to lower tax rates for middle and low-income earners, ensuring Americans see tangible benefits.
• Investments in Social Programs: The bill allocates resources towards bolstering social programs aimed at addressing critical societal needs, from funding for education and healthcare initiatives to support for affordable housing and nutrition programs.
• Incentives for Economic Growth: In a bid to stimulate economic growth and job creation, the legislation includes provisions to incentivize investment and innovation. By offering tax incentives for businesses and entrepreneurs, the bill aims to foster a climate conducive to robust economic expansion.

Looking Ahead: As the Tax Relief for American Families and Workers Act of 2024 moves forward, attention will now turn to the Senate, where lawmakers will consider the bill’s merits and potential amendments. With momentum building behind the legislation, there is optimism that it will ultimately receive the necessary support to become law.

In the meantime, please reach out to your LMC professionals for more information or questions regarding the bill and its potential implications for your tax situation this year. Our team will be sending out updates as the bill moves through the Senate.