Advocacy News – Jan. 24, 2024
What’s Happening? The federal Ways and Means committee recently moved a bipartisan package, the “Tax Relief for American Families and Workers Act of 2024.” The package addresses major tax credits that benefit businesses and their employees:
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Companies can once again expect full expensing on domestic research and development (R&D) expenses, restoring a pre-Tax Cuts and Jobs Act (TCJA) practice.
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Full R&D expensing will be retroactive for tax years (TY) 2022 and 2023, and will last only until 2025.
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Also in the legislation, the federal child tax credit has been expanded to adjust for inflation and expedite the phase-in process of users with multiple dependents. Under the legislation, the credit’s maximum would increase to $2,100 for TY 2024 and 2025.
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Simultaneously, the credit’s refundability limit would see an adjustment to $1,800 for TY 2023, $1,900 for TY 2024, and $2,000 for TY 2025.
The cost: The legislation outlines that cracking down on the widespread abuse of the federal Employee Retention Tax Credit and subsequent reimbursements to the Internal Revenue Service will help cover some of the costs of the expanded and extended tax credits.
For more information, check out MI Chamber partner Tax Foundation’s article on the legislation or contact Leah Robinson at lrobinson@michamber.com.