United States Capitol Building in Washington DC
Key members of Congress announced last week a tentative agreement on an expansion of the child tax credit as well as extensions of important tax relief for business. The agreement, announced by Senate Finance Committee Chair Ron Wyden (D-OR) and House Ways and Means Chair Jason Smith (R-MO), has been introduced in the House as the Tax Relief for American Families and Workers Act of 2024. The legislation enables businesses to immediately deduct (known as full expensing) U.S.-based R&D investments rather than amortize those investments over five years. This change alone is expected to save American businesses an estimated $82.7 billion in 2024.
The bill also extends the allowance for depreciation, amortization or depletion in calculating the limitation on the deduction of business interest which will help lower the cost of capital for thousands of businesses. Included as well is an extension of 100% bonus depreciation on qualifying property placed in service after December 31, 2022, saving businesses an estimated $32.8 billion in 2024.
Finally, the legislation provides for an increase of the limit on depreciable asset expensing to $1.29 million from the current $1 million and these limitations will be adjusted for inflation beginning after 2024.
These reforms are most welcome to the business community and the Chamber will be actively engaging the Indiana federal delegation to encourage support for the legislation.
