The House of Representatives recently passed House Bill 7024, known as the Tax Relief for American Families and Workers Act of 2024, with significant bipartisan support. This landmark legislation aims to realign America’s tax code to bolster economic growth, support working-class families, and provide certainty for American businesses in a climate of economic recovery and innovation.

Key provisions of H.R. 7024 include an expansion of the child tax credit, significant support for American innovation through expanded Research & Development (R&D) expensing, and enhanced measures to improve the competitive stance of U.S. businesses internationally. Specifically, the bill proposes to:

  • Increase access to housing by providing more flexibility on bond financing requirements and increasing state tax credit allocations.
  • Eliminate the penalty in the child tax credit for families with more than one child, alongside increasing the refund amount and indexing these amounts to inflation starting in 2024.
  • Offer “time-limited and limited in scope” disaster tax relief for communities affected by recent calamities, including hurricanes and wildfires.
  • Ends ERC program early on January 31, 2024, adds penalties for certain COVID-ERC promoters and extends statue of limitations to 6 years.
  • Increases maximum amount for section 179 expensing with a slight raise in expensing limit allowance (cost of equipment and software) to $1.29 M (up from $1.16M)/ Limit adjusted for inflation after 2024.
  • Delays three TCJA business extenders
    • Deduction for section 174 research & experimental expenditures
    • Extension of 100% bonus depreciation
    • Extension of section 163(j) interest expense calculation as EBITDA

Additionally, the legislation addresses the need for low-income housing by enhancing the Low-Income Housing Tax Credit and increases the expensing cap for small businesses, encouraging investment and simplifying tax compliance. The bill also seeks to save taxpayer dollars by ending the Employee Retention Tax Credit program, which has been susceptible to fraud and cost overruns​​​​.

As the bill moves to the Senate for deliberation, its broad bipartisan backing in the House suggests a favorable outlook for its passage. This legislation represents a pivotal step towards updating America’s tax policy to support families, stimulate economic growth, and ensure a competitive global stance for American businesses. We will continue to keep you updated as the bill progresses and if you have any questions, please reach out to your Linkenheimer CPA.