As lawmakers continue negotiations over the language of the budget reconciliation package, Argentum is continuing to advocate for inclusion of our policy priorities and to protect against cuts that would harm access to care for seniors. As currently drafted, the package does not make cuts to Medicaid assisted living programs, but does include these priorities:
- Tax deduction for seniors. Argentum has advocated for the Credit for Caring Act (H.R. 2036 and S. 925), which would provide a $5,000 tax credit for long-term care expenses. While the reconciliation package does not include this legislation, it does include a $4,000 deduction for seniors per eligible filer with a modified adjusted gross income that does not exceed $75,000 for single filers ($150,000 for married filing jointly). The senior deduction is available to both itemizers and non-itemizers, and is allowed for tax years 2025 through 2028.
- Career savings plans. Argentum has been working with the Tomorrow’s Workforce Coalition to advance the Freedom to Invest in Tomorrow’s Workforce Act (H.R. 1151 & S. 756), bipartisan legislation to promote workforce development by allowing tax-exempt distributions from 529 savings plans to be used for additional qualified higher education expenses, including “qualified postsecondary credentialing expenses” in connection with “recognized postsecondary credential programs” and “recognized postsecondary credentials.” We believe this will be helpful for senior living workers seeking to advance their career through various credentialing programs.
Other notable provisions of the package include:
- No tax on overtime. This provision creates an above-the-line deduction for overtime premium pay during a given taxable year. The deduction is allowed from tax years 2025 through 2028.
- No tax on tips. This provision creates an above-the-line deduction for qualified tips received by an individual in an occupation which traditionally and customarily receives tips during a given taxable year. The deduction is allowed from tax years 2025 through 2028.
- Extension of special depreciation allowance for certain property. This provision permanently allows taxpayers to immediately expense 100 percent of the cost of qualified property acquired on or after January 20, 2025.
- Modified calculation of adjusted taxable income for purposes of business interest deduction. This provision permanently increases the cap on the deductibility of business interest expense for taxable years beginning after December 31, 2024. Specifically, it provides that “adjusted taxable income” is computed without taking into account deductions for depreciation, amortization, or depletion. As a result, “adjusted taxable income” corresponds with the financial accounting concept of earnings before interest, taxes, depreciation, and amortization (EBITDA).
- Increased dollar limitations for expensing of certain depreciable business assets. This provision increases the maximum amount a taxpayer may expense under IRC section 179 to $2.5 million, reduced by the amount by which the cost of qualifying property exceeds $4 million. The $2.5 million and $4 million amounts are adjusted for inflation for taxable years beginning after 2025.
- Modifications to low-income housing credit. For calendar years 2026 through 2029, the “9% LIHTC” is restored to its 2021 level with a 12.5 percent allocation increase; for the “4% LIHTC”, this provision lowers the bond-financing threshold to 25 percent for projects financed by bonds with an issue date before 2030; it also designates Indian and rural areas as “Difficult Development Areas” (DDAs).
Limitation on individual deductions for certain State and local taxes, etc. This provision would increase the SALT cap to $30,000 permanently for taxable years beginning after December 31, 2025. It requires partnerships and S corporations to treat specified taxes as separately stated items; imposes an addition to tax in certain cases where a partnership makes a state or local tax payment, one or more partners receives a state or local tax benefit, and the allocation of the tax payment differs from the allocation of the tax benefit; prevents the capitalization of specified taxes; and grants the Secretary of the Treasury regulatory authority to prevent avoidance of the SALT cap.