Breaking Down the $78 Billion Tax Bill: A Comprehensive Look at the Tax Relief for American Families and Workers Act of 2024

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78 billion tax bill FEATURED

In this article, Joe Lanzi, Shareholder, breaks down the latest news on the $78 billion tax bill.

The House has approved a comprehensive $78 billion tax bill, named The Tax Relief for American Families and Workers Act of 2024 (H.R. 7024). This legislation encompasses various provisions affecting tax credits, expensing of research expenditures, and reinstating tax breaks for businesses from the Tax Cuts and Jobs Act. 

Please note: the bill still has to be passed by the Senate. See below. 

Key Provisions of the Bill

Employee Retention Credit (ERC): 

  • Prohibiting additional claims for the ERC starting from Jan. 31, 2024, with the current deadline being April 15, 2025. 
  • Enforcing various provisions related to the ERC, such as extending the statute of limitation on assessment, defining a “COVID-ERTC promoter,” and increasing penalties for non-compliance. 

Child Tax Credit (CTC): 

  • Increasing the maximum refundable amount per child to $1,800 in tax year 2023, $1,900 in tax year 2024, and $2,000 in tax year 2025, with inflation adjustments for the latter two years.  

Business Tax Breaks: 

  • Amending Section 174 to delay the requirement that Research and Experimental (R&E) costs must be capitalized and amortized over a five-year period until tax years beginning after December 31, 2025. This would allow domestic R&E costs paid or incurred in tax year beginning after December 31, 2021 to be expensed.  
  • Extending 100% bonus depreciation for qualified property placed in service after December 31, 2022, and before January 1, 2026. 
  • Increasing Section 179 deduction to $1.29 million from $1.16 million with an increase to the phase out limit to $3.22 million from $2.89 million. 

The bill has a total cost of $77.5 billion, partially offset by $77.1 billion in savings resulting from the revised ERC filing deadline. It passed in the House with a vote of 357–70 and is now set to move to the Senate, where it has support from key figures such as Finance Committee Chair Ron Wyden and Majority Leader Chuck Schumer. 

How Tonneson Can Help 

In the wake of the latest tax legislation developments, it’s crucial to have a strategic partner to navigate the changing landscape. Tonneson + Co stands ready to help you make informed decisions and optimize your financial position. 

Whether you’re seeking assistance with Employee Retention Credits, Child Tax Credits, or navigating the complexities of business tax breaks, Tonneson + Co’s seasoned professionals are equipped to guide you. 

Let's Talk

If you’re interested in working with Tonneson + Co, please reach out to us. We look forward to hearing from you!

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