The AGC-supported Tax Relief for American Families and Workers Act would provide tax relief for contractors.
On January 31, the House of Representatives “suspended the rules and passed” the Tax Relief for American Families and Workers Act (H.R. 7024), which required support of two-thirds of voting members of Congress. The final vote was 357-70, with 169 Republicans supporting, along with 188 Democrats.
Before the vote, AGC issued a KEY VOTE letter in support of the legislation. Thank you to the hundreds of AGC members that contacted their members of Congress and asked them to vote in favor of the bill through an AGC Action Alert.
Amongst other things, this legislation would:
- Roll back a provision that forces construction firms to amortize their research and development expenses over five years, rather than writing them off in the year they are incurred. This can include costs, including staff salaries, for design/build project activities, developing and improving pre-fabrication methods and other ways to increase efficiency, performance, and reliability, and many other construction-related activities.
- Reinstate full expensing for new and used business equipment by allowing construction firms to fully deduct those expenses in the year the equipment is placed in service.
- Simplify tax preparation by increasing the threshold at which businesses have to issue certain informational tax returns (1099’s) to independent contractors, from $600 to $1000.
Now the bill moves to the Senate, where its timely consideration is clouded by many competing concerns, including the potential for amendments and inherent procedural delays. Senate Majority Leader Chuck Schumer (D-N.Y.) has endorsed the bill, and Finance Committee Chairman Ron Wyden (D-Ore.) is leading the effort to get it through the Senate quickly. However, some key Republicans, including Finance Committee Ranking Member Mike Crapo (R-Idaho), have expressed a desire to make unspecified changes. In the best-case scenario, the bill will pass the Senate before they recess on February 9, but that is unclear given the Senate calendar, and the potential for an impeachment trial of Secretary Mayorkas. In the worst-case scenario, this could easily drag out until March, or perhaps even later, disrupting the tax filing season.
If you have any questions or concerns, please contact Matthew Turkstra at (202) 547-4733, or [email protected].
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