On September 22nd, The House of Representatives passed, by a vote of 253 to 173, HR 4 entitled “The Jobs for America Act of 2014” (hereinafter “JAA”) , which would simplify and make permanent the I.R.C. § 41 Research and Experimentation Tax Credit (hereinafter “RTC”) on a retroactive basis. JAA also includes several other provisions previously approved by the House of Representatives to extend retroactively and on a permanent basis bonus depreciation; I.R.C. § 179 expensing; select S corporation provisions; and to repeal retroactively the medical device excise tax.
Among other changes to RTC, the bill would increase the Alternative Simplified Credit methodology (hereinafter “ASC”) rate to 20% and eliminate the “Regular” methodology option under Section A of Form 6765. This action by the House of Representatives is part of an ongoing effort by the House Ways and Means Committee to make permanent select expired tax provisions. In contrast, the Senate Finance Committee in early April approved an $85 billion ‘tax extenders’ bill (S. 2260) that would temporarily extend the RTC and more than 50 other expired or expiring tax provisions on a retroactive basis through the end of 2015. Senate efforts to act on the Finance tax extenders bill have been delayed due to a lack of agreement on which floor amendments could be considered.
The outlook for final legislative action on expired tax provisions remains uncertain. At this time, final action on tax extenders — including reconciling the House and Senate bills —could occur in the lame-duck session of Congress after the November midterm Congressional elections.
For legislative updates from Capitol Hill and complete coverage of the latest statutory, administrative, and judicial interpretations please connect with Peter J. Scalise on TaxConnections.
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