Tax Relief Act 2024: Boosting Family and Business Credits
The proposed Tax Relief for American Families and Workers Act of 2024 has the potential to significantly impact tax credits for businesses and families, with key changes expected in the child tax credit, low-income housing credit, and R&D expensing. This legislative initiative, led by Senate Finance Committee Chairman Ron Wyden and House Ways and Means Committee Chairman Jason Smith, aims to bring about substantial changes to the existing tax framework. The bill seeks to enhance tax credits for businesses and families, potentially improving the child tax credit, low-income housing credit, and R&D expensing. The proposed legislation also aims to end the employee retention tax credit (ERC) and provide enhanced disaster relief for some taxpayers.
One of the key aspects of the tax framework focuses on R&D expensing rules and child tax credit changes, which could have a profound impact on tax returns for the 2023, 2024, and 2025 tax years. The proposed changes are designed to provide greater tax relief for American families and strengthen Main Street businesses, ultimately boosting competitiveness with global economic powers such as China. Moreover, the legislation aims to have Congress pass the bill in time for families and businesses to benefit in the upcoming tax filing season.
The maximum refundable child tax credit amount would be increased under the proposed deal for the 2023, 2024, and 2025 tax years. Specifically, under this deal, the refundable child tax credit amount would increase by $200 for the 2023 tax year, and by $100 for the 2024 and 2025 tax years. This enhancement in the child tax credit is expected to have a direct positive impact on millions of American families, providing them with increased financial support during the specified tax years.
Senate Finance Committee Chairman Ron Wyden emphasized the significance of the proposed plan, highlighting that “fifteen million kids from low-income families will be better off as a result of this plan.” He expressed the importance of passing pro-family policy to help children from low-income families get ahead, particularly in the current political climate. Similarly, House Ways and Means Committee Chairman Jason Smith lauded the bipartisan agreement, stating that American families will benefit from the legislation, which provides greater tax relief, strengthens Main Street businesses, boosts competitiveness with China, and creates jobs.
The proposed tax proposal would also restore a previous interest deduction for businesses, expand small-business expensing, and extend bonus depreciation, along with full expensing for research and development costs through 2025. Furthermore, the acceleration of the deadline for filing backdated ERC claims to January 31, 2024, is expected to save over $70 billion in taxpayer dollars, providing significant relief to the taxpayers and enhancing the efficiency of the tax credit system.
In conclusion, the proposed Tax Relief for American Families and Workers Act of 2024 represents a comprehensive effort to bring about substantial changes to the existing tax framework, with a focus on enhancing tax credits for businesses and families. The legislation, if passed, is poised to have a direct and positive impact on American families, businesses, and the overall competitiveness of the nation’s economy. With bipartisan support and a clear focus on providing tax relief and support to families and businesses, the proposed tax framework holds the potential to significantly reshape the tax landscape for the specified tax years.
The information provided is for general informational purposes only and should not be considered as financial advice.