January 31, 2024

This afternoon, the House is expected to hold a vote on the “Tax Relief for American Families and Workers Act.” Among other provisions, this legislation would: (1) restore full and immediate expensing for investments in machines, equipment, and vehicles; and (2) extend and increase for inflation the section 179 expensing of “qualifying property” (i.e., depreciable tangible personal property, off-the shelf computer software, and qualified real property) that is purchased for use in the active conduct of a trade or business.

To pay for these tax benefits, the bill is moving forward from April 15, 2025 to January 31, 2024 the deadline by which companies may file backdated claims under the COVID-era Employee Retention Tax Credit (ERTC) – a program that has come to be widely viewed as permeated with fraud and abuse. The legislation also seeks to dramatically increase the penalties associated with improper ERTC claims and extends to six years from the date of filing the statute of limitations for the government to pursue fraudulent ERTC claims.

The vote in the House comes after GOP leadership came to an agreement with moderate New York lawmakers to consider legislation next week to address the state and local tax (SALT) deduction after SALT provisions were kept out of the bipartisan tax deal.

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