A bipartisan tax package lawmakers introduced by the leadership of House and Senate tax committees yesterday would extend key measures surrounding bonus depreciation and research and development expensing. House Ways and Means Committee Chairman Jason Smith (R-Missouri) and Senate Finance Committee Chairman Ron Wyden (D-Oregon) unveiled the agreement, characterizing it as a common sense, bipartisan, bicameral tax framework.
The path forward for the Tax Relief for American Families and Workers Act of 2024 was unclear, but backers of the package were anxious to move on it given the 2023 tax season begins later in the month. While the package covers the child and low-income housing tax credits, it also includes a range of business-oriented measures.
These include an extension for 100 percent depreciation for most qualified business property placed into service before Jan. 1, 2026. However, the provision extends that further, to before Jan. 1, 2027, “for longer-production period property and certain aircraft.” The measure would continue 20 percent bonus depreciation for two more years after that.
In addition, the agreement would restore full research and experimental expensing through 2025. Currently, these costs must be amortized over five years.
Aerospace Industries Association president and CEO Eric Fanning praised the agreement, saying, “This framework returns the country to a tax code that drives the development of cutting-edge technologies, creates good-paying jobs, and supports small businesses.”