AmericanHort asks members to urge senators to pass Tax Relief for American Families and Workers Act

AmericanHort is urging its members to contact U.S. senators and ask them to support and pass the Tax Relief for American Families and Workers Act (H.R. 7024).

The House of Representatives passed the bipartisan tax package, 357 to 70. The Senate has announced they will consider the bill this week. Specifically, the legislation does the following:

• Extends bonus depreciation: Under current law, the bonus depreciation amount is 80% for assets placed in service in 2023. The proposal extends 100% bonus depreciation from Jan. 1, 2023, through Dec. 31, 2025, with 20% bonus depreciation for property acquired and placed in service in 2026.
• Increases Section 179 deduction: For several years, the 179 deduction was limited to $1 million, with the phase-out starting when taxpayers placed more than $2.5 million in assets in service. The proposal increases the maximum expensing to $1.29 million, with phase-out beginning at $3.22 million assets placed in service, adjusted for inflation in years beginning after 2024.
• Restores deduction for Section 174 research expenditures:  The bill restores immediate deductions for business research and development (R&D) costs. The proposal would allow, retroactive to 2022, Section 174 domestic expenditures to be currently deductible. Section 174 expenditures will be required to be capitalized after Dec. 31, 2025. For taxpayers who capitalized Section 174 expenditures for their 2022 tax year, these expenses will be recovered over two years, with 50% of the remaining amortizable cost deductible in 2023 and the remainder in 2024.  If the Senate doesn't act, businesses could pay thousands or millions of dollars in additional taxes, according to AmericanHort.
• Rolls back business interest expense limitation changes: For tax years beginning after Dec. 31, 2023, and before Jan. 1, 2026, adjusted taxable income returns to EBITDA (rather than EBIT). If the taxpayer elects, the taxpayer can also use EBITDA for tax years 2022 and 2023. The proposal requires the IRS to issue procedures for claiming the retroactive benefit.
• Expands the child tax credit: The proposal increases the refundability of the child tax credit in two ways: the maximum refund increases to $1,800 for 2023, and the refundability is calculated per child.

"It is critical the Senate pass this legislation immediately. Your engagement in this advocacy effort is greatly appreciated," AmericanHort said.