Congress actually accomplished something last week. Representatives and Senators kicked the can down the legislative road agreed to measures that eliminated the immediate threat of a government shutdown.
Even more surprising was another bipartisan deal.
While the stop-gap government deal was being brokered, the Democratic Senate Finance Committee chair and his Republican counterpart leading the House Ways and Means Committee signed off on a tax bill.
Both SFC Chair Sen. Ron Wyden (D-Oregon) and W&M Chair Rep. Jason Smith (R-Missouri) touted the family and business benefits of their bill, with the 2024 campaign-ready title The Tax Relief for American Families and Workers Act of 2024.
The key provisions cited by both leaders of the tax-writing committees are —
- An enhanced Child Tax Credit, with a phased increase to tax credit's refundable portion, and an inflation adjustment beginning in 2024 (the main family push by Democrats);
- Renewal of Research & Development (R&D) expensing that allows all businesses to immediately deduct the cost of their U.S.-based investments (a key worker/business provision sought by the GOP);
- Easier tax relief for communities struck by major disasters;
- Enhanced Low-Income Housing Tax Credit; and
- Elimination of the fraud-plagued Employee Retention Tax Credit program.
Tax legislation shout outs: The nearly identical tax bill announcements from Wyden and Smith are the first of this weekend's Saturday Shout Outs related to this latest tax measure.
Additional shouts go to other items discussing the proposed legislation, as well as its uncertain prospects for enactment so that things like the Child Tax Credit and R&D costs could be applied retroactively to the 2023 tax year. They include —
- Technical summary of The Tax Relief for American Families and Workers Act of 2024
- Tax Foundation Analysis of the Tax Relief for American Families and Workers Act of 2024
- Tax extenders compromise faces barriers in both chambers by Dustin Stamper, Tax Legislative Affairs Practice Leader at Grant Thornton
- Bipartisan tax deal clears Ways and Means; March funding bill emerges as possible legislative vehicle from Deloitte's Tax News & Views Capitol Hill Briefing
- Congress Unlikely to Pass Tax Deal Before Filing Season Begins by Lindsey McPherson for The Messenger.
- Tax Bill Materializes, But Will It Pass?, the Capitol Hill Recap by Jay Heflin, Assistant Director of Tax Legislative Affairs in Eide Bailly's Washington D.C. office
Hopeful, but not certain: Again, while this bill ticks off a lot on the wish lists from both sides of the aisle, there are dissenters in both parties.
Time also is not on the tax measure's side, whether it is considered as a standalone bill or attached to one of the short-term spending bills that will come before Congress to avert agency closures on March 1 and March 8.
The White House and Senate and House leaders reportedly are scheduled to meet to discuss a variety of pending measures. This is likely to be one of them.
You also might find these items of interest:
- IRS welcomes voluntary disclosure of dubious ERC claims
- The Truth About Paying Fewer Taxes: Truth #9 – Why Credits Are Better
- Tax-reducing deductions, credits, and exclusions get an inflation bump in 2024
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