On May 12th, the House Ways and Means Committee unveiled a draft of a new 2025 tax proposal that includes a range of significant updates.
Although the bill remains in the early stages of the legislative process, here are a few notable provisions currently on the table:
Corporate:
- Bonus Depreciation & Section 179: The proposal temporarily brings back 100% bonus depreciation through 2029 (and 2030 for certain property having longer production periods). The proposal also raises limits on Section 179 expensing from $1,000,000 to $2,500,000.
- R&D Cost Treatment: Full and immediate expensing of domestic research and development expenditures would be restored through 2029, rolling back the current amortization requirements.
- Section 163(j) Interest Deduction: Reinstates the earnings before interest, taxes, depreciation, and amortization (EBITDA) limitation for 2025 – 2029.
- Business Tax Relief: The bill expands access to small business deductions and raises the thresholds for using the cash method of accounting.
- Low-Income Housing Tax Credit: The proposal provides an increase in the state housing credit ceiling for calendar years 2026 – 2029. Read more on LIHTC here.
Individual:
- Extension of TCJA Provisions: Many of the individual tax cuts originally enacted under the 2017 Tax Cuts and Jobs Act would be extended beyond their current expiration date in 2025.
- Child Tax Credit Modifications: The proposal would make permanent the $2,000 child tax credit enacted under the 2017 Tax Cuts and Jobs Act and would also temporarily increase that amount to $2,500 for the 2025-2028 tax years.
- Estate Tax: The proposal would permanently increase the estate tax exemption to $15,000,000.
- Section 199A Pass–Through Deduction: The deduction on certain qualified business pass-through income would be made permanent and increased to 23%.
Though the legislation is still in flux and subject to revision, these proposed changes may have important implications for year-end tax planning. BRC is monitoring the bill as it progresses through Congress and will keep our clients informed of updates and revisions made to this initial draft. For more information, view the full amendment here: House Ways & Mean Bill.