Tax Relief Bill Makes Its Way Through Congress - Tax Relief for American Families and Workers Act of 2024
Posted on Thursday, February 01, 2024
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On January 31, the US House of Representatives passed H.R. 7024, The Tax Relief for American Families and Workers Act of 2024 by a 357-70 bipartisan vote. The bill would provide relief to affected taxpayers for recently changed tax provisions. Here are key proposals under this legislation:
Research and Development Expenses
The act retroactively restores Section 174 expensing for domestic R&D expenses, applicable for tax years after December 31, 2021, through those beginning before January 1, 2026. Current law requires such expenses to be amortized.
Child Tax Credit
Families would see an increase in the child tax credit starting in 2023 and indexed benefits after 2023.
Bonus Depreciation and Section 179 Deduction
The Act brings back 100% bonus depreciation through 2025. Under current law, bonus depreciation is set at 80% for 2023, 60% for 2024, and 40% for 2025. The Act would also increase the limit for Section 179 first-year expensing of depreciable business assets to $1,290,000 for 2024 and beyond, promoting further investment in equipment and technology.
1099 Reporting and ERC Claims Adjustments
The reporting threshold for 1099-NEC and 1099-MISC forms is increased to $1,000 for 2024, reducing the administrative load on small businesses. Additionally, the deadline for filing Employee Retention Credit (ERC) claims is accelerated, with a six-year statute of limitations. There are also heightened penalties for unscrupulous promoters.
Awaiting Senate Action
Many of these provisions would have a material effect on 2023 tax returns with March and April 2024 due dates. Hopefully, the Senate will act on this bill before it begins its two-week recess on February 12. DWD will continue to monitor the situation.
Posted in Tax Topics For Individuals
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