Your Voice Matters. Urge your representatives in Congress to extend and enhance the tax provisions of the TCJA.
We’ve completed our initial analysis of the Senate Finance Committee’s legislative text.
Below is a detailed summary along with key supporting documents.
TCJA Extension – As with the House-passed bill, the legislation makes permanent or extends several expiring provisions from the 2017 Tax Cuts and Jobs Act (TCJA), including:
- Individual Income Tax Rates: The bill makes permanent the individual income tax rates enacted by TCJA. As with the House bill, the Senate legislation does not include a new bracket for high-income individuals.
- Section 199A Pass-Through Deduction: The bill makes permanent the 20 percent Section 199A qualified business income deduction, among several other changes. The House-passed bill includes an increase in the deduction to 23 percent.
- Alternative Minimum Tax: The bill makes permanent TCJA’s increase in the alternative minimum tax (AMT) exemption but reverts the exemption phaseout thresholds to 2018 levels. The reversion may result in additional individuals being subject to the AMT and therefore excluded from claiming the SALT deduction.
- Estate and Gift Tax: The bill permanently increases the estate and gift tax exemption level to $15 million, beginning after December 31, 2025, and indexes the increase to inflation.
Business Provisions – The bill includes several sought-after business provisions, as well as incentives for domestic manufacturing. As anticipated, the Senate proposal permanently extends several business tax provisions. The House-passed bill would extend the provisions through 2028.
- Bonus Depreciation: The legislation permanently restores 100 percent bonus depreciation, effective January 20, 2025, allowing businesses to immediately deduct 100 percent of the cost of certain short-term investments (e.g., equipment and machinery) from their taxable income in the first year rather than over fixed intervals.
- Interest Deductibility: The bill restores the EBITDA (earnings before interest, taxes, depreciation, and amortization)-based limitation on the net business interest deduction effective December 31, 2024.
- R&D Expensing: The bill provides for immediate expensing of domestic research and development (R&D) expenditures effective after December 31, 2024. As with the House, the Senate proposal maintains current capitalization and amortization requirements for foreign R&D expenditures.
Key Supporting Documents and References:
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