House Ways and Means Committee Releases Tax Reform 2.0 Bills
On Monday, the House Republicans released three separate bills marketed as Tax Reform 2.0 ahead of the mid-term elections in November.
The three bills released are as follows:
H.R. 6760- The Protecting Family and Small Business Tax Cuts Act of 2018
This bill is aimed at extending tax cuts for individuals and making them permanent. Highlights include:
- Permanently increasing the standard deduction
- Permanently repealing personal exemptions
- Permanently capping the deduction for state and local income taxes
- Permanently extending the 20% Section 199A deduction for pass-thru entities and small businesses
H.R. 6757- The Family Savings Act of 2018
This bill makes certain changes to retirement plans and Section 529 college savings plans.
H.R. 6756- The American Innovation Act of 2018
This bill is designed to promote business innovation and addresses areas including start-up costs.
Opposition in the Senate
Political commentators believe it is unlikely that the Senate will take up the new legislation in the near term. The introduction of the new bills is primarily seen as a way of generating political talking points ahead of the November mid-terms.
The permanent capping of the state and local tax deduction is unpopular in high tax states such as New York and New Jersey so the inclusion of this provision will cause additional opposition.
Next Steps
We will continue to update you on new tax legislation as proposals are announced. CLA is here to assist you in analyzing how all of the new tax rules impact your institution. Please contact us.
Amanda Garnett is a principal in the financial institutions practice of CliftonLarsonAllen (CLA) from Peoria, Illinois. She currently leads the firm’s Midwest financial institution tax team and serves institutions ranging in size from $15 million to $3.5 billion in total assets. In addition to tax compliance, Amanda assists clients in the areas of tax consulting, mergers and acquisitions, and regulatory reporting. She also routinely teaches courses for banking associations across the country.
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