Welcome to this week’s edition of Tax Bytes. Our team of tax lawyers is actively monitoring for federal and international tax developments and issues of note. Each week we pull together the items we deem most important to provide updates you need to know for your business.
Tax developments
On May 12, 2025, the Republicans on the House Committee on Ways and Means released a draft bill – “One, Big, Beautiful Bill” – showing their tax plan for the budget reconciliation legislation. The legislation will likely undergo significant changes as it works its way through the broader House membership and Senate. In the below alerts, our team summarizes key components of the bill.
House confirms favorable modifications to three key business tax provisions
Among the myriad of new and revised provisions, the bill contains favorable updates to three key business tax provisions from 2017’s Tax Cuts and Jobs Act (TCJA). More specifically, the bill as currently drafted includes an extension of 100% bonus depreciation, a return to full, immediate expensing for domestic research and experimental expenditures, and adjustments to the business interest expense limitation taking into consideration EBITDA, as opposed to merely EBIT. While the final content of this bill is expected to change, in this initial draft, taxpayers should appreciate the efforts made by the House to modify these three key business tax provisions favorably.
Read our full alert here.
House tax bill proposes changes to information reporting rules
Several of the bill’s provisions would affect information reporting and withholding requirements.
As expected, the bill would reinstate the de minimis threshold for Form 1099-K reporting by third party settlement organizations to the $20,000 and 200 transaction levels that existed prior to the 2021 amendments to section 6050W. Consistent with H.R. 7024, as passed by the House in 2024, the information reporting threshold for payments reportable under sections 6041 and 6041A, would increase, from the current $600 to $2,000, which would be indexed for inflation.
In addition, several new information reporting requirements would be added to support substantive provisions in the bill such as no tax on tips, overtime, or car loan interest, and the proposed excise tax on remittance transfers.
Read our full alert here.
The one, big, beautiful benefits legal alert
The House’s new tax legislation covers a number of potential changes to US benefits items, including:
- Increasing child care credits for certain employers and making paid family and medical leave tax credits permanent.
- Allowing on-site health clinics to be fully HSA-compliant, as well as a number of other changes to HSAs.
- Amending the Section 162(m) and Section 4960 taxes on “excess” compensation paid to executives.
Read our full alert here.
House tax bill proposes major changes to the Employee Retention Tax Credit (ERTC)
The bill includes sweeping changes to the Employee Retention Tax Credit (ERTC), also commonly known as the ERC. Chief among them are targeted enforcement actions against ERTC promoters as well as a proposal to retroactively disallow ERTC claims filed after January 31, 2024, a move that could affect hundreds of thousands of businesses.
Read our full alert here.
Exempt organization revenue raisers under House tax bill
Several of the provisions in the draft would affect tax-exempt organizations.
Read our full alert here, which summarizes the principal provisions affecting tax-exempt organizations.
Recent Eversheds Sutherland Tax insights
Reforms to the UK’s transfer pricing, permanent establishment and Diverted Profits Tax rules
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