Lately on the Hill
Congress is wrapping up legislative business prior to midterm elections, with a few key items on the agenda:
- Senate Finance Committee Chair Ron Wyden and Senator Mike Crapo introduced the bipartisan retirement legislation, Enhancing American Retirement Now (EARN) Act, for a vote on the Senate floor. The bill passed unanimously in the Senate Committee back in June.
- As a reminder, this bill would provide a matching credit valued at 50% of contributions up to a maximum of $2,000 and phase out between $20,500 and $35,500 in annual income for single filers; allow penalty-free withdrawals from retirement accounts for victims of domestic abuse; and provide a government-matching contribution to retirement accounts for low- to moderate-income taxpayers.
- This bill also has a provision which would disallow charitable deductions for conservation contributions if the deduction is more than two and a half times the sum of each partner’s basis.
- Although the Senate has limited days left in session and their priority is to pass the government funding bill, due to the bipartisan support of the EARN Act thus far, this bill has a fighting chance to become law in the near future, perhaps as part of a tax extenders package. For context, the House passed similar retirement legislation with a vote of 414-5 (the Securing a Strong Retirement Act of 2022) last spring.
- A summary of the bill is available here and legislative text here.
- Congress also needs to pass a series of bills to fund the government for FY 2023 or pass a temporary resolution to fund the government until December.
- The funding bills are likely to include tax extenders, which would extend items like deductions for racehorses and tax credits for railroad track maintenance.
- The JCT has complied a complete list of expiring federal tax provisions, which includes items expiring 2021 that may be included in this tax extender legislation.
- But what everyone wants to know is if R&D expensing is going to be included, which is seen as the “last chance” for a legislative fix on this issue for tax year 2022. To learn more about the R&D issue, listen to this episode of Simply Tax.
- Although draft tax extender legislation is expected this month, it likely won’t be voted on until after mid-term elections.
- The Senate also is supposed to address circuit court judge nominations and codifying same-sex marriage into law.
Note, most of this is likely to happen in September. The Senate is scheduled to be in session in October, but few are expecting them to return to the Hill so close to elections.
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