The US House of Representatives on September 28 voted 220 to 191 to approve a ‘tax reform 2.0’ bill (H.R. 6760) that would make permanent certain 2017 tax reform act provisions affecting individuals, including income tax cuts, the new Section 199A deduction for certain pass-through business income, and revenue-raising provisions such as the cap on the federal deduction for state and local taxes. These provisions of the 2017 act currently are set to expire at the end of 2025.
The House on September 27 voted to approve a bill (H.R. 6757) to promote retirement savings and address issues related to certain employer-provided retirement savings programs, including multiemployer and pooled employer plans, and a bill (H.R. 6756) to enable small businesses to deduct more of their ‘start-up’ costs and to reduce barriers to new business formation.
The House recessed until after the November 6 midterm elections. While the Senate is not expected to vote this year on legislation to make permanent expiring 2017 tax reform provisions, both chambers could consider other tax legislation after the midterm elections in a ‘lame-duck’ session of the current Congress. Tax legislation that may be considered later this year includes potential ‘technical corrections’ to certain provisions of the 2017 tax reform act and legislation to extend certain expired or expiring tax provisions, such as Section 45 renewable energy provisions. There also has been some bipartisan support for proposals dealing with retirement savings incentives and IRS reforms.
While the current Congress is not expected to complete action on legislation addressing the 2025 sunset of individual tax reform provisions and the pass-through deduction, there may be an opportunity during a post-election lame-duck session for Congress to consider technical corrections to the 2017 tax reform act and other tax legislation.