The House Ways and Means Committee has recently moved to advance The Tax Relief for Workers and Families Act with the Senate awaiting a version for vote soon. The bill would revive a number of expired tax breaks, including the enhanced Child Tax Credit, deductions for research and development expenses in the first year, 100% bonus depreciation, improvements to the Low-Income Housing Tax Credit, disaster tax relief, a tax agreement with Taiwan, and more. Congressional leaders had hoped to pass the $78 billion bill before tax-filing season began, but not so. Last week, lawmakers on the committee introduced amendments to lift the $10,000 cap on state and local tax deductions from the Tax Cuts and Jobs Act of 2017 and allow the enhanced Child Tax Credit to provide monthly payments to families. Other proposals of potential interest to individuals and employers include:
- Extension of the allowance for depreciation, amortization, or depletion in determining the limitation on business interest deductibility. Generally applicable for tax years beginning between December 31, 2023 and January 1, 2026, with an election available for tax years beginning between December 31, 2021 and January 1, 2024.
- Expensing for research and development (R&D). Generally effective for domestic R&D costs paid or incurred in tax years beginning between December 31, 2021 and January 1, 2026.
- Increase in the limitations on expensing of depreciable business assets. Generally effective for property placed in service in tax years beginning after December 31, 2023.
- Enhancement of the low-income housing tax credit.
Stand by for updates as soon as they become available.