Small Business Tax Relief Act
Sponsored By: Representative Craig
Introduced
Summary
Rewriting tax rules for investment managers and small corporations. This bill would change corporate rates for small C corporations and create a new Subchapter K regime that reclassifies many partnership gains tied to investment management as ordinary income and tightens reporting and penalties.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Bigger self-employment tax deduction under $400K
If passed, individuals with AGI under $400,000 could deduct 75% of self-employment taxes, instead of 50%. This would lower taxable income and could reduce taxes owed. It would apply to tax years starting after December 31, 2024.
Lower tax rate for small corporations
If enacted, C corporations with taxable income up to $5,000,000 would get a lower starter rate. They would pay 18% on the first $400,000 and 21% on income above $400,000. Corporations over $5,000,000 would generally pay 21% on all income. This would apply to tax years ending after enactment.
Tougher tax rules on carried interest
If enacted, partners who provide investment management services would have more income taxed as ordinary income, not capital gains. Selling or getting paid out on these partnership interests could also be taxed as ordinary income. Certain dividends and small-business stock gains tied to these interests would not get special rates. Treasury would set detailed rules. Most changes would start after enactment, with a 10‑year delay for one related rule.
Higher tax on corporate stock buybacks
If passed, the excise tax on stock repurchases would rise to 1.5% from 1%. The higher rate would apply to buybacks after December 31, 2024. For example, a $1,000,000 buyback would owe $15,000 instead of $10,000.
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Sponsors & CoSponsors
Sponsor
Craig
MN • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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