With NAHB’s Strong Backing, House Passes Tax Bill
On a solid bipartisan vote of 357 to 70, the House approved the American Families and Workers Act of 2024, legislation that would expand the federal child tax credit and enact a number of other business-related provisions.
NAHB strongly supports the roughly $80 billion tax package, which contains a number of provisions of interest to the housing and business community. Specifically, the bill would:
- Strengthen the Low-Income Housing Tax Credit (LIHTC). LIHTC helps finance the construction and preservation of affordable rental housing. This bill would temporarily increase the amount of credits allocated to states by 12.5% for calendar years 2023 through 2025. The measure also provides more flexibility when using bonds to finance a LIHTC project.
- Extend the 100% Bonus Depreciation. Businesses were permitted to claim 100% bonus depreciation in 2022 for qualifying assets placed in service in 2022. The rate decreased to 80% in 2023, and was set to drop to 60% in 2024, 40% in 2025, 20% in 2026, and zero in 2027. The legislation would allow businesses to claim 100% bonus depreciation for investments in machines, equipment and vehicles for tax years 2023, 2024 and 2025, providing a retroactive tax benefit for 2023.
- Expand Section 179 Expensing. The provision increases the maximum amount a taxpayer may expense to $1.29 million, reduced by the amount by which the cost of qualifying property exceeds $3.22 million. The $1.29 million and $3.22 million amounts are adjusted for inflation for taxable years beginning after 2024.
- Increase the Threshold for Information Reporting on Forms 1099-NEC and 1099-MISC. Under current law, the reporting threshold for payments by a business for services performed by an independent contractor or subcontractor and for certain other payments is generally $600. The legislation would increase the threshold to $1,000 and adjusts it for inflation after 2024.
The legislation is paid for, at least in part, by accelerating the deadline for filing backdated claims under the Covid-era Employee Retention Tax Credit (ERC), as well as increasing penalties on entities promoting fraudulent ERC claims and granting the IRS additional time to scrutinize ERC claims.
The strong House vote provides much-needed momentum as the bill moves to the Senate. While NAHB will be urging Senate lawmakers to move quickly to pass this legislation — and there is a sense of urgency to act fast as the tax filing season is just getting underway — the ultimate fate of the bill remains uncertain.
Some senators have expressed concerns with certain provisions in the legislation, and it is unclear if, and when, the upper chamber will vote on the bill.