The Tax Relief for American Families and Workers Act (the Act) has been in the hands of the Senate since the House passed its version of the bill on February 1, 2024. Check out our other articles on an overview of the bill and passage by the House Proposed Bipartisan Tax Plan Released – Overview of the Tax Relief for American Families and Workers Act of 2024 and Our Thoughts On.
A two-week Senate recess in February and preoccupation with the need for spending legislation and other national and international issues are reasons for the lack of progress. Given those priorities, and with requests by some Senators for the bill to go through a committee markup, the Senate has yet to act.
Some Republican Senators are weighing whether some of the provisions included in the $78 billion tax package currently stuck in the chamber are in the best interest of the country. Currently, the Senate’s top Republican tax writer says he does not think supporters of a $79 billion tax package have enough Republican backers to bring it to a floor debate or vote. The Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) has said there are dozens of ideas for adds or subtractions to the package from Senate Republicans, including traditional tax extenders, technical corrections to the SECURE 2.0 Act of 2022 retirement legislation, and nixing the tax package’s only budget offset — an early end to employee retention credit claims. Senator Crapo is among Senate Republicans voicing concern regarding the bill’s prior-year income lookback provision for determining the child tax credit.
It takes 60 votes in the Senate for legislation to bypass a filibuster and make it to the floor. Assuming all 48 Democratic Senators along with three independents who usually caucus with them support the bill, nine Republican votes would be needed to begin debate on the bill. While several Republicans have indicated support for the bill, other Republicans are still not on board.
Given the above – no action is the action taken by the Senate on the tax bill at this time. Note that the House passed a $460 billion spending package earlier this week that would keep key federal agencies operating through the remainder of the budget year. The Senate is expected to take up the spending bill legislation before a midnight Friday deadline. The effort necessary to get the spending bill completed would seem to take Senate attention away from any discussion of the tax bill (and the spending bill does not contain the tax proposals).
Even if the Senate passes a tax bill but it contains different provisions than those contained in the House version of the bill (for which it seems some Republican Senators are advocating), then the bill will need to go back to the House for another vote.
In conclusion, then, passage of the Act is far from certain, and the uncertainty is causing disquiet with both taxpayers who may benefit from some of its retroactive provisions and tax preparers facing a March 15 deadline for completion of business tax returns (and not even addressing the impact on state tax law of the federal changes). Even if something were to pass this week, it might be too late to incorporate those changes into returns due March 15. This leaves taxpayers and tax preparers in difficult situations. To file now or to extend? With regrets to Shakespeare, that is the question.
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