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The U.S. House of Representatives has announced the passage of H.R. 7024, the Tax Relief for American Families and Workers Act of 2024 by a landslide vote of 357-70.
Jointly introduced by Senate Finance Committee Chair Ron Wyden and House Ways and Means Committee Chair Jason Smith, the Tax Relief for American Families and Workers Act of 2024 is a bipartisan tax framework that promotes the financial security of working families, that boosts growth and American competitiveness, and will strengthen and support communities and Main Street businesses.
Specifically, H.R. 7024 aims to:
- Enhance the Low-Income Housing Tax Credit (LIHTC)
- Support working families with an enhanced Child Tax Credit by increasing the maximum credit per child from $1,600 to $2,000 through 2025 (adjusting for inflation in 2024 and 2025)
- Expand innovation and competitiveness with pro-growth economic policies like R&D expensing
- Build up Main Street by cutting red tape and rebuilding communities struck by disasters with tax relief
- Eliminate fraud and waste by ending the Employee Retention Tax Credit program
“This tax package is pro-growth, pro-jobs, and pro-American,” said Rep. Smith, one of the architects of the bill. “Both the $600 billion of pro-growth tax incentives that benefit job creators and the structure and work requirements of the Child Tax Credit in this legislation were first signed into law by President Trump. Last year, the Ways and Means Committee traveled the country and listened to small business owners and American workers about their ideas to make life better for themselves and their neighbors. The Tax Relief for American Families and Workers Act is a direct response to their plea for relief. Because of this bill, working parents crushed by high prices will have an easier time putting food on the table, more things will be made here in America, and the nation will be more competitive with China. I am eager to get this bill passed by the Senate and signed into law. Millions of working families and Main Street businesses are counting on Congress to get this done. Let’s deliver.”
The affordable housing portion of the Tax Relief for American Families and Workers Act of 2024 seeks to increase the state housing credit ceiling for the Low-Income Housing Credit (LIHTC). In calendar years 2018-2021, the 9% LIHTC ceiling was increased by 12.5%, allowing states to allocate more credits for affordable housing projects. The new provision restores the 12.5% increase for calendar years 2023-2025, and is effective for taxable years beginning after December 31, 2022.
Under current law, in order to receive the LIHTC, a building must either receive a credit allocation from the state housing finance authority or be bond-financed. To be bond-financed, 50% or more of the aggregate basis of the building and land must be financed with bonds that are subject to a state’s private activity bond volume cap. The Tax Relief for American Families and Workers Act of 2024 lowers the bond-financing threshold to 30% for projects financed by bonds with an issue date before 2026. This section provides a transition rule for buildings that already have bonds issued by requiring that a building must have 5% or more of its aggregate basis financed by bonds with an issue date in 2024 or 2025. This provision is effective for buildings placed in service after December 31, 2023. In the case of rehabilitation expenditures, which are treated as a separate new building by the IRS, the building is considered placed in service at the end of the rehabilitation expenditures period. The 30% requirement is applied to the aggregate basis of both the existing building and the rehabilitation expenditures.
“The Mortgage Bankers Association (MBA) is pleased the House has passed this bipartisan bill that increases the availability of Low-Income Housing Tax Credits (LIHTC),” said MBA President and CEO Robert D. Broeksmit, CMB. “The enhancements to the LIHTC program will improve the supply and affordably challenges in the rental market by producing an estimated 200,000 additional rental units over the next two years. We will continue to highlight the bill’s important housing provisions to lawmakers on both sides of the aisle and call for its passage in the Senate as soon as possible.”
Sen. Wyden, upon introduction of H.R. 7024, said, “Sixteen million kids from low-income families will be better off as a result of this plan, and given today’s miserable political climate, it’s a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead. At a time when so many people in Oregon and all across America are getting clobbered by rising rents and home prices, the improvements this plan makes to the Low-Income Housing Tax Credit will build more than 200,000 new affordable housing units. By incentivizing R&D, this plan is also going to promote innovation and help sharpen our economic competitiveness with China and the rest of the world. My goal remains to get this passed in time for families and businesses to benefit in this upcoming tax filing season, and I’m going to pull out all the stops to get that done.”
Click here for more information on H.R. 7024, the Tax Relief for American Families and Workers Act of 2024.
