On Jan. 16, Congress introduced important legislation called the “Tax Relief for Families and Workers Act of 2024” (the “Act”) which could have broad benefits to businesses harmed by the expiration of certain provisions of the Tax Cuts and Jobs Act (TCJA) of 2017.
Notably, the Act would delay the section 174 capitalization provisions to 2025 and restore R&D expensing retroactive to 2022. Among other provisions, the Act would also restore bonus depreciation through 2026, increase the depreciation expense cap, and allow calculation of section 163(j) interest expense using EBITDA for tax years beginning after 1/1/21 and before 1/1/26. On the personal tax front, the Act would expand the child tax credit for three years and allow families with multiple children to take advantage of the credit.
The Act also introduces new penalties for certain “bad actors”, i.e., ERTC promoters or advisors to the greater of $200,000 or 75% of the income derived from such advice, if such promoter or advisor is found to have aided and abetted the understatement of a tax liability.
If your company the could benefit from R&D expensing or additional bonus depreciation, now is the time to call your Senator or Congressman to voice your support for this important legislation.
See below for full text of the Act. https://www.finance.senate.gov/imo/media/doc/the_tax_relief_for_american_families_and_workers_act_of_2024_technical_summary.pdf