Wide Ranging Tax Bill Approved
On January 19, 2024, the House Ways and Means Committee overwhelmingly approved the Tax Relief for American Families and Workers Act of 2024 by a 40-3 vote. The bill provides for increases in the child tax credit, delays the requirement to deduct research and experimentation expenditures over a five-year period, extends 100-percent bonus depreciation through 2025, and increases the Code Sec. 179 deduction limitation, among other business-friendly provisions. The bill would also extend tax treaty-like benefits to Taiwan, and extend some disaster-related tax relief. The provisions are paid for by changes to the COVID-era employee retention tax credit, including an acceleration of the termination of the period for making new claims, and increasing penalties on erroneous or fraudulent credit claims.
Most of the significant provisions in the bill are retroactively applicable to prior tax years. The hope is to get this bill to President Biden before filing season begins for the 2023 tax year. However, it is unclear if this is possible given House and Senate schedules, though the bill enjoys bipartisan support in both chambers of Congress. Even if Congress could pass the bill before filing season starts, changes that are retroactively applied to the 2023 tax season could surely lead to a delay in processing returns.
Source: CCH AnswerConnect Editorial