On Jan. 16, House Ways and Means Committee Chair Jason Smith and Senate Finance Committee Chair Ron Wyden announced an agreement on a bipartisan tax relief package, The Tax Relief for American Families and Workers Act of 2024 (the Act), to defer changes to bonus depreciation, interest expense deductions, and the deduction of research or experimental costs, and to make changes to the Employee Retention Tax Credit (ERTC) and Low-Income Housing Tax Credit (LIHTC) programs. If enacted, the Act would, among other things:

• Allow taxpayers to claim 100% bonus depreciation for qualified property placed in service after Dec. 31, 2022, and before Jan. 1, 2026.
• Allow taxpayers to calculate the business interest limitation in Section 163(j) using earnings before interest, taxes, depreciation, and amortization (EBITDA) for taxable years beginning after Dec. 31, 2021, and before Jan. 1, 2026.
• Allow taxpayers to currently expense domestic research or experimental costs that are paid or incurred in tax years beginning after Dec. 31, 2021, and before Jan. 1, 2026.
• Increase relevant penalties on ERTC promoters or advisors to the greater of $200,000 or 75% of the income derived from such advice, if such promoter or advisor is found to have aided and abetted the understatement of a tax liability.
• Reduce the 50% test requirement under Section 42 in connection with the issuance of tax-exempt bonds and LIHTCs to 30%.
• Retain the state LIHTC allocation of 12.5%.