The House on September 28 passed legislation to permanently extend the individual and pass-through tax cuts enacted last year as part of tax reform.
As outlined at the recent NMHC Fall Meeting by House Ways and Means Chairman Kevin Brady (R-Texas), the tax provisions – which the House bill would permanently renew past their scheduled expiration at the end of 2025 – include:
- Individual income tax rate reductions, including reducing the top rate to 37 percent;
- 20 percent tax deduction for pass-through businesses (e.g., LLCs, partnerships, and S Corporations), effectively lowering the top rate to 29.6 percent for qualifying income; and
- Doubling of estate and gift tax exemption amounts.
Notably, the House bill also renews a revenue-raising provision that limits the deduction of losses attributable to active pass-through income exceeding $500,000 for married couples and $250,000 for single filers.
NMHC/NAA strongly support making the tax reduction provisions permanent, but action will likely have to wait until a future session of Congress.