As anticipated, the Senate Republicans released a tax reform plan on Nov. 9, which is positioned to heavily impact individuals and businesses. Like the Tax Cuts and Jobs Act released by the House GOP earlier in November, the plans calls for lowering the individual and corporate tax rates, repealing several tax credits and deductions, enhancing the child tax credit, eliminating the Alternative Minimum Tax (AMT), boosting business expensing, both domestically and internationally, and more.
Doeren Mayhew’s tax advisors highlight details from the Senate GOP plan below and how it compares to the House GOP bill:
Like the House GOB bill, the Senate GOP plan also calls for abolishing AMT. Additionally, both the Senate GOP plan and House GOP bill do not change the current tax treatment of qualified dividends, capital gains, Affordable Care Act, net investment income, Medicare and medical device excise tax.
Like the House GOP bill, the Senate GOP plan keeps the research and development credit, but does not require the five-year amortization of research and development expenditures. Additionally, the rules for business meals would be revised.
Under both plans, foreign tax credit carryforwards would be fully available and foreign tax credits triggered by the deemed repatriation would be partially available to offset the U.S. tax. This is in an effort to provide an incentive for businesses to not shift operations overseas moving forward.
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