Budget Reconciliation Bill Signed by President Trump

The budget reconciliation bill – H.R. 1 – that President Donald Trump signed into law at the end of last week includes numerous provisions relevant to banks. These include:

  • A revised cap on how much funding the Director of the CFPB can request from the Federal Reserve; previously capped since 2013 at an amount not to exceed 12 percent of the Fed’s total operating expenses, and which is now capped at 6.5% (In the PDF version of the bill, see Section 30001 on p. 55 of 330);
  • The permanent extension of the Section 199A pass-through deduction rate of 20%, which is relevant for Subchapter S banks (See Section 70105 on p. 90 [and the replacement of the Dec. 31, 2025 sunset that previously appeared in 26 USC 199A(i)]);
  • The permanent extension of increased estate tax and gift tax exemption amounts to $15 million and adjusted for inflation in future years (See Section 70106 on p. 91);
  • A permanent 100% bonus depreciation effective for most property placed in service on or after Jan. 19, 2025 (See Section 70301 on p. 117);
  • Permanent expensing for domestic research and development expenditures paid or incurred in tax years beginning after Dec. 31, 2024 (See Section 70302 on p. 119);
  • A reinstatement of the EBITDA (instead of EBIT) limitation under Section 163(j) for tax years beginning after Dec. 31, 2024 (See Section 70341 on p. 136);
  • Permanent renewal and enhancements of Opportunity Zones (See Section 70421 on p. 152);
  • A permanent increase to the state housing credit ceiling and a lowering of the bond-financing threshold for projects financed by bonds, beginning in 2026 (See Section 70422 on p. 163);
  • The permanent extension of New Markets Tax Credits to support growth in distressed communities (See Section 70423 on p. 164);
  • A modified version of the ACRE Act, under which banks will be permitted to exclude from gross income 25% of interest income derived from any “qualified real estate loan” without a sunset date (See Section 70435 on p. 174); and
  • An exemption from remittance tax for almost all transfers from banks and thrifts (See Section 4475 on p. 214).
sdbrownlow
Author: sdbrownlow

Student of Design