The House has released the much-anticipated Republican tax proposal, a multi-trillion-dollar plan that could reshape U.S. tax policy across health care, education, clean energy, and—critically—small business. While the $4.9 trillion plan is still in early stages and likely to evolve, it sets the stage for intense debate ahead of a potential vote.
Key highlights for small business owners include:
Opportunity Zones Revamp: More oversight, rural focus, and extended benefits through 2033.
Bigger Deductions: Expanded business interest and qualified business income deductions (raised from 20% to 23%).
Faster Write-Offs: 100% immediate expensing of eligible property and factory improvements.
R&D Boost: Immediate deduction of domestic R&D expenses, with retroactive relief for smaller firms.
Clean Energy Cuts: Elimination of many EV and renewable energy credits.
Tax Relief for Workers: Overtime and tips excluded from taxable income through 2028.
New Childcare Credits: Enhanced and separate credits for businesses with 50 or fewer employees.
Healthcare and Student Loan Incentives: Expanded Health Reimbursement Arrangements (HRAs), permanent employer student loan assistance, and more flexible HSAs.
Manufacturing Perks: Raises small manufacturer qualification threshold to $80M in revenue.
Rural Lending Breaks: Lenders can exclude a portion of interest income from rural real estate loans.
Other Cuts: Repeals 10% tanning tax and adjusts third-party payment reporting thresholds.
The bill has drawn praise from business groups for its pro-growth credits and deductions, but criticism remains over potential cuts to Medicaid and clean energy programs. While nothing is final, these proposals could significantly shape the small business landscape if enacted.
