Business groups and congressional supporters continued to make a final push for a tax extenders deal as the opportunities for legislation dwindle.
Key lawmakers said that negotiations are ongoing over a potential agreement to trade child tax credit enhancements for restoring research expensing under Section 174, reinstating 100% bonus depreciation and providing relief for the Section 163(j) limit on interest deductions. Nearly 150 House Republicans sought to add momentum to the effort by writing a letter to House Speaker Mike Johnson, R-La., urging action on the business provisions before the end of the year. Business groups have also stepped up their lobbying with a blitz of advertising.
Despite the push, major hurdles remain, and the opportunities for a deal are narrowing. An agreement struck to fund the government through January and February of 2024 robs negotiators of the usual legislative vehicle carry a tax package. Congress is close to finishing its business for the year, with only reauthorization for the Federal Aviation Administration and a few other spending priorities likely to move. Congress is also considering moving on Taiwan tax relief. It would be challenging to add a tax package to any of these vehicles, though it is a possibility.
Broad governmental funding deadlines in January and February could still be vehicles for a tax deal, but the effort gets more difficult the farther Congress gets into 2024. Election year politics and the start of the filing season will complicate any effort next year. The cost of a potential package also remains a problem, and lawmakers have so far been unable to find a mutually acceptable compromise on individual and business relief despite two years of trying.
Taxpayers should keep an eye out over the next two months to see if Congress can pull together a last-minute deal, but it may also be appropriate to begin assessing planning options to address Section 163(j) and Section 174 moving forward. Calendar-year taxpayers generally had to implement the changes for the 2022 return but may not have had the capacity to assess proactive planning that could soften the impact.
Contact:
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.
More tax hot topics
No Results Found. Please search again using different keywords and/or filters.