Advocacy News – Feb. 15, 2024
What’s Happening? The “Tax Relief for American Families and Workers Act of 2024” has officially passed the U.S. House of Representatives and is now awaiting hearings in the U.S. Senate. The package addresses major tax credits that benefit businesses and their employees particularly related to the federal research and development (R&D) tax credit and the child tax credit.
What now? Should this legislation make it’s way through the Senate and to the President, businesses and employees can expect the following changes to the federal R&D tax credit and the child tax credit until 2025.
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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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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.
For questions or more information, please contact Leah Robinson at lrobinson@michamber.com.