Tax Relief for American Families and Workers Act of 2024

New legislation passed in house! ??????

?We are pleased to inform you that the Tax Relief for American Families and Workers Act of 2024 has been passed by the House, bringing significant changes to our tax system.

?Below is a summary of each key part of the bill and how it might affect you or your business.

?Part 1: Tax Relief for Working Families

?? Refundable Child Tax Credit Changes: Increases in the maximum refundable child tax credit to $1,800 (2023), $1,900 (2024), and $2,000 (2025). The credit calculation now involves 15% of earned income above $2,500, multiplied by the number of qualifying children. Also, there's an inflation adjustment for 2024 and 2025.

?Part 2: American Innovation and Growth

?? Research Expenditures: Extension of the current deduction for domestic research costs until after December 31, 2025.

?? Business Interest Deduction: The use of EBITDA for Adjusted Taxable Income calculation is extended until 2026.

?? 100 Percent Bonus Depreciation: Extended for qualified property placed in service until the end of 2025.

?? Expensing of Business Assets: Increase in the maximum expense amount under IRC section 179 to $1.29 million.

?Part 3: Increasing Global Competitiveness

?? Reduced Withholding Taxes: New rates for Taiwanese residents, with interest and royalties taxed at 10%, and dividends generally at 15%.

?? Permanent Establishment Rules: Revision of U.S. income tax applicability based on the PE standard for Taiwanese residents.

?? Income from Employment: Exemption of certain wages for qualified Taiwanese residents from U.S. tax.

?Part 4: Assistance for Disaster-Impacted Communities

?? Casualty Loss Deductions: Removal of the requirement that losses exceed 10% of AGI for disaster-related personal casualty losses.

?? Wildfire Relief Payments: Exclusion of qualified wildfire relief payments from gross income until 2025.

?? East Palestine Disaster Relief: Exclusion of East Palestine train derailment payments from gross income.

?Part 5: More Affordable Housing

?? State Housing Credit Ceiling: Restoration and increase of the Low-Income Housing Tax Credit ceiling for 2023-2025.

?? Tax-Exempt Bond Financing: Reduction of the bond-financing threshold for LIHTC eligibility.

?Part 6: Tax Administration and Eliminating Fraud

?? Reporting Threshold Increase: Forms 1099-NEC and 1099-MISC reporting threshold increased to $1,000, with post-2024 inflation adjustments.

?? COVID-Related ERTC Penalties: Increased penalties related to understating tax liabilities and extended statute of limitations.

This comprehensive act covers a wide array of tax areas, from family benefits to business incentives, international relations, and support for disaster-impacted communities. It's important to understand how these changes may affect your financial planning and tax liabilities.

?At Mertz International Limited, we're excited to help you navigate this new landscape. Schedule a time to connect with our team to discuss. Contact us at [email protected].