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This week, the chairs of Congress’ two main tax committees – House Ways and Means Committee Chairman Jason Smith (R-Missouri) and Senate Finance Committee Chairman Ron Wyden (D-Oregon) – announced a bipartisan deal to enhance and extend a number of tax credits and deductions. The provisions include revival of the expanded Child Tax Credit, as well as immediate expensing for research and development costs, full interest expense deductibility, 100% bonus depreciation for investment in machines, equipment and vehicles, an expansion of small business expensing from $1 million to $1.29 million, and an enhanced Low Income Housing Tax Credit aimed at increasing the supply of low-income housing.
“American families will benefit from this bipartisan agreement that provides greater tax relief, strengthens Main Street businesses, boosts our competitiveness with China, and creates jobs,” House Ways and Means Committee Chair Jason Smith (R-Mo.) said in a Tuesday morning statement.
To help pay for the deal, the agreement would end the Employee Retention Tax Credit program, which many in Congress believe has been a locus of fraudulent business activity in the wake of the pandemic. It is unclear whether the bill, known as the Tax Relief for American Families and Workers Act of 2024, will be passed by Congress, which is currently at odds on passing budget and appropriation bills and rushing to pass a continuing resolution by January 19 to avert a partial government shutdown.
We will keep you apprised on developments related to this bill.
Further reading: House, Senate tax chiefs announce deal on business deductions, low-income credits
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