The recent Senate decision to block the Tax Relief for American Families and Workers Act (H.R. 7024) means our hopes for a reprieve on Section 174 expensing related to U.S. R&D credits are dashed for now.
The U.S. Senate recently blocked the House-passed Tax Relief for American Families and Workers Act (H.R. 7024). This setback also extinguishes our hopes for a reprieve from the elective Section 174 expensing provisions related to U.S. R&D credits before this year’s tax filing deadline.
The bill included a critical provision allowing taxpayers to deduct Section 174 expenses rather than capitalizing them under current law. Despite broad bipartisan support for this change, opposition to other aspects of the bill—such as the expansion of childcare benefits—ultimately derailed efforts to secure a more favorable tax treatment for Section 174 in 2024.
The Takeaway
With the presidential election on the horizon, partisan maneuvering in Congress may have played a role in the bill’s defeat. As Congress reconvenes in January 2025, we hope that legislators will reconsider this legislation during the lame-duck session, a time when unexpected progress can sometimes be made. In the meantime, continue to advocate for tax relief related to Section 174. Persistent engagement and pressure on lawmakers are crucial for reigniting discussions and advancing taxpayer relief on this important issue.
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