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DC Tax Flash: House Tees Up Final Vote on Virus Relief Reconciliation Bill

Tax Alert

The House Rules Committee is meeting today to prepare for consideration of the Senate-passed version of the $1.9 trillion virus relief reconciliation bill (H.R. 1319). The House is expected to debate and vote on the bill tomorrow. House passage would clear it for the President's signature.

On tax policy affecting businesses, the bill includes provisions that would:

  • Extend the tax rules for excess business loss limitations under Internal Revenue Code section 461(l) for an additional year
  • Modify Internal Revenue Code section 162(m) to prevent publicly traded companies from deducting the compensation of their 10 highest-paid executives
  • Increase the exclusion for employer-provided dependent care assistance for 2021 from $5,000 to $10,500 (and from $2,500 to $5,250 for a married person filing separately)
  • Expand and extend credits for paid family and medical leave through September 30, 2021
  • Lower to $600 the threshold transaction amount that third party settlement organizations must report under Internal Revenue Code section 6050W(e)
  • Expand and extend the Employee Retention Credit through 2021
  • Prevent companies from allocating interest expenses on a worldwide basis beginning in 2021
  • Exclude from tax funds provided through the Small Business Administration's Economic Injury Disaster Loan program and certain restaurant grants
  • Revise the rules for multiemployer plans and certain other pension plans. These provisions include:
    • Temporary delay of designation of multiemployer plans as in endangered, critical, or critical and declining status
    • Temporary extension of the funding improvement and rehabilitation periods for multiemployer pension plans in critical and endangered status for 2020 or 2021
    • Adjustments to funding standard account rules
    • Special financial assistance program for financially troubled multiemployer plans
    • Extended amortization for single employer plans
    • Extension of pension funding stabilization percentages for single employer plans
    • Modification of special rules for minimum funding standards for community newspaper plans

House Democratic leaders expect the bill to pass, albeit narrowly. The 627-page text of the Senate-passed reconciliation bill is posted here. The bill's tax provisions begin on page 342.

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