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R&D Tax Capitalization Amendment Status (May 2024 Update): The “Tax Relief for America Families & Workers Act of 2024” (H.R.7024)

As a recent status update on the pending R&D capitalization amendment bill (“Tax Relief for America Families & Workers Act of 2024”, H.R.7024) regarding the upcoming 2023 tax extension filing due later this year, this past month Senate Finance Chair Ron Wyden (D-Ore.) attempted to attach the bipartisan R&D tax amendment bill H.R. 7024 (which Wyden drafted with House Ways & Means Chair Jason Smith (R-Mo.)) to the Federal Aviation Administration (FAA) five-year reauthorization bill (H.R. 3935) this past week [1]. However, FAA bill (H.R. 3935) was passed earlier this month (5/9/24) without the proposed tax amendments [2], as many analysts expected since the tax bill amendment proposal attachment still includes the enhanced Child Tax Credits (CTC) which certain GOP senators (i.e., Mike Crapo (R-ID), Wyden’s Republican counterpart on the Finance Committee) are against based on its currently drafted CTC eligibility language [1], [3].

 

Although it has been reported Senate Majority Leader Chuck Schumer has previously indicated that the Senate could consider the bill in “the weeks and months ahead” as of late April 2024 [3], it’s also being reported he hasn’t show “any inclination to make a big push for the tax bill while the tax season was happening, and hasn’t made any suggestions that might be changing” as of recently [4].

 

There’s still hope the R&D amending tax bill may pass sometime this summer before the tax extension filings. However, to manage expectations, the prior momentum for the tax bill’s passing in the Senate appears stagnate with dwindling optimism during this tax filing season. Because this is an election year, the tax amendment bill may be punted to next year after the presidential election. Nevertheless, we should have more clarity by this summer so taxpayers can plan accordingly for the upcoming 2023 tax filing extensions.


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[1] Ernst & Young (EY) Tax News Update (U.S. Edition), “What to expect in Washington (May 8)” (5/8/24), https://taxnews.ey.com/news/2024-0929-what-to-expect-in-washington-may-8; Ernst & Young (EY) Tax News Update (U.S. Edition), “This Week in Tax Policy for May 6” (5/6/24), https://taxnews.ey.com/news/2024-0910-this-week-in-tax-policy-for-may-6

[2] Aviation International News, “FAA Bill Overwhelmingly Passes Senate” (5/10/24), https://www.ainonline.com/aviation-news/business-aviation/2024-05-10/faa-bill-overwhelmingly-passes-senate

[3] The Hill, “The bipartisan tax bill contains a critical fix to spur American innovation” (4/23/24), https://thehill.com/opinion/finance/4616385-the-bipartisan-tax-bill-contains-a-critical-fix-to-spur-american-innovation/

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