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Senate to Consider Tax Bill with Changes to Bonus Depreciation

February 8, 2024

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The House of Representatives recently passed a tax bill that would affect the 2023 tax returns for many businesses and individuals. This bill is now in the Senate where there is currently no timetable for consideration despite passing the House with an overwhelmingly bipartisan vote.  It is unclear whether the bill will be passed in its current form, if there will be any changes to the final bill or if it passes at all.  The Senate is scheduled for a two-week recess until February 29th which makes it likely that we will not know the outcome until mid-March.   The Senate also has a full agenda including two government funding deadlines on March 1st and March 8th.

The key provisions in the current bill are below.

  • Reinstatement of 100% bonus depreciation for the 2023 tax year
  • Expensing of research & experimental costs under Section 174, beginning with the 2022 tax year
  • Timeline and enforcement updates to the Employee Retention Credit (ERC)
  • Child Tax Credit Calculation Modifications
  • Changes to the Interest Expenses Limitation under Section 163(j)

To see a more detailed summary of the bill, please click here.

This potential tax legislation may affect our ability to complete tax returns in a timely manner. If a tax bill is passed, the IRS may change its timing of accepting tax returns as well. Many of these provisions would reduce the tax impact to our clients, so we may recommend waiting to file affected returns until there is a better sense of any possible changes. Otherwise amended tax returns will be needed to take advantage of the beneficial tax provisions.

Please contact your Wilkins Miller advisor if you have any questions on how these changes may impact your potential tax impact and timing of your tax returns.