The full bill has been released for the proposed Tax Relief for American Families and Workers Act of 2024. We anticipate a vote taking place prior to January 29 due to the inclusion of the Child Tax Credit increase so that individuals can file beginning January 30. Read on to learn about some of the key takeaways.
Child Tax Credit
- The refundable portion of the Child Tax Credit will now be calculated individually for each child, with an increase in the maximum refundable amount from $1,600 to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025.
Section 174/41
- Full expensing for domestic research & experimental expenditures paid or incurred during taxable years beginning after December 31, 2021, through taxable years beginning before December 31, 2025.
- Foreign R&E expenses are still required to be capitalized and amortized for 15 years for expenses paid or incurred during taxable years after December 31, 2021.
- For taxpayers who capitalized and amortized domestic R&E expenses in 2022, there is no amendment needed.
- 174 that was capitalized will be addressed with a Change in Accounting Method on a modified cut-off basis over tax years 2023 and 2024.
Cost Segregation
- 100% Bonus Depreciation is extended through December 31, 2025. 20% Bonus Depreciation will be available in 2026.
ERTC
- The ERC program will be terminated on January 31, 2024. No additional claims will be accepted after this date.
- Increased penalties for preparers found to be involved in fraudulent claims.
- Statute for IRS assessments of ERC claims is extended to 6 years.
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This article is reproduced with permission from KBKG.