U.S. House Advances Bipartisan Tax Bill

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A $78 billion bill that would restore research and development (R&D) expensing, bonus depreciation, expand the Child Tax Credit, and phase out the Employee Retention Tax Credit (ERTC), among other things, is making its way through Congress. Last week, the Tax Relief for American Families and Workers Act of 2024 successfully passed out of the House Ways and Means Committee with strong bipartisan support. The bill is a compromise proposal negotiated by the Republican-controlled House Ways and Means Committee and Senate-controlled Finance Committee. It may be considered for a full vote by the House as early as next week.

Key features of the pro-growth tax relief package include:

  • An extension of full expensing for R&D investments through 2025
  • An extension of 100% bonus depreciation for all business investments in machines, equipment, and vehicles through 2025, and retroactive 100% bonus depreciation for investments made since the end of 2022
  • The restoration of a less restrictive limitation on business deductions for net interest expense
  • An increase the amount of low-income housing tax credit (LIHTC) available to states by 12.5 percent
  • Expanded access to the Child Tax Credit, and an increase the maximum credit amount adjusted for inflation, and an increase in the limit on refundability
  • An acceleration of the deadline for filing backdated claims to January 31, 2024, under the COVID-era employee retention tax credit (ERTC) which will save over $70 billion.

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