II 

Calendar No. 349 

118TH CONGRESS 

2D SESSION H. R. 7024 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 1, 2024 

Received 

MARCH 20, 2024 

Read the first time 

MARCH 21, 2024 

Read the second time and placed on the calendar 

AN ACT 

To make improvements to the child tax credit, to provide 

tax incentives to promote economic growth, to provide 

special rules for the taxation of certain residents of Taiwan with income from sources within the United States, 

to provide tax relief with respect to certain Federal disasters, to make improvements to the low-income housing 

tax credit, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS; ETC. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Tax Relief for American Families and Workers Act of 

4 2024’’. 

5 (b) AMENDMENT OF 1986 CODE.—Except as other6 wise expressly provided, whenever in this Act an amend7 ment or repeal is expressed in terms of an amendment 

8 to, or repeal of, a section or other provision, the reference 

9 shall be considered to be made to a section or other provi10 sion of the Internal Revenue Code of 1986. 

11 (c) TABLE OF CONTENTS.—The table of contents of 

12 this Act is as follows: 

Sec. 1. Short title; table of contents; etc. 

TITLE I—TAX RELIEF FOR WORKING FAMILIES 

Sec. 101. Per-child calculation of refundable portion of child tax credit. 

Sec. 102. Increase in refundable portion. 

Sec. 103. Inflation of credit amount. 

Sec. 104. Rule for determination of earned income. 

Sec. 105. Special rule for certain early-filed 2023 returns. 

TITLE II—AMERICAN INNOVATION AND GROWTH 

Sec. 201. Deduction for domestic research and experimental expenditures. 

Sec. 202. Extension of allowance for depreciation, amortization, or depletion in 

determining the limitation on business interest. 

Sec. 203. Extension of 100 percent bonus depreciation. 

Sec. 204. Increase in limitations on expensing of depreciable business assets. 

TITLE III—INCREASING GLOBAL COMPETITIVENESS 

Subtitle A—United States-Taiwan Expedited Double-Tax Relief Act 

Sec. 301. Short title. 

Sec. 302. Special rules for taxation of certain residents of Taiwan. 

Subtitle B—United States-Taiwan Tax Agreement Authorization Act 

Sec. 311. Short title. 

Sec. 312. Definitions. 

Sec. 313. Authorization to negotiate and enter into agreement. 

Sec. 314. Consultations with Congress. 


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Sec. 315. Approval and implementation of agreement. 

Sec. 316. Submission to Congress of agreement and implementation policy. 

Sec. 317. Consideration of approval legislation and implementing legislation. 

Sec. 318. Relationship of agreement to Internal Revenue Code of 1986. 

Sec. 319. Authorization of subsequent tax agreements relative to Taiwan. 

Sec. 320. United States treatment of double taxation matters with respect to 

Taiwan. 

TITLE IV—ASSISTANCE FOR DISASTER-IMPACTED COMMUNITIES 

Sec. 401. Short title. 

Sec. 402. Extension of rules for treatment of certain disaster-related personal 

casualty losses. 

Sec. 403. Exclusion from gross income for compensation for losses or damages 

resulting from certain wildfires. 

Sec. 404. East Palestine disaster relief payments. 

TITLE V—MORE AFFORDABLE HOUSING 

Sec. 501. State housing credit ceiling increase for low-income housing credit. 

Sec. 502. Tax-exempt bond financing requirement. 

TITLE VI—TAX ADMINISTRATION AND ELIMINATING FRAUD 

Sec. 601. Increase in threshold for requiring information reporting with respect 

to certain payees. 

Sec. 602. Enforcement provisions with respect to COVID-related employee retention credits. 

1 TITLE I—TAX RELIEF FOR 

2 WORKING FAMILIES 

3 SEC. 101. PER-CHILD CALCULATION OF REFUNDABLE POR4 TION OF CHILD TAX CREDIT. 

5 (a) IN GENERAL.—Subparagraph (A) of section 

6 24(h)(5) is amended to read as follows: 

7 ‘‘(A) IN GENERAL.—In applying subsection 

8 (d)— 

9 ‘‘(i) the amount determined under 

10 paragraph (1)(A) of such subsection with 

11 respect to any qualifying child shall not ex12 ceed $1,400, and such paragraph shall be 


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1 applied without regard to paragraph (4) of 

2 this subsection, and 

3 ‘‘(ii) paragraph (1)(B) of such sub4 section shall be applied by multiplying each 

5 of— 

6 ‘‘(I) the amount determined 

7 under clause (i) thereof, and 

8 ‘‘(II) the excess determined 

9 under clause (ii) thereof, 

10 by the number of qualifying children of the 

11 taxpayer.’’. 

12 (b) CONFORMING AMENDMENT.—The heading of 

13 paragraph (5) of section 24(h) is amended by striking 

14 ‘‘MAXIMUM AMOUNT OF’’ and inserting ‘‘SPECIAL RULES

15 FOR’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 December 31, 2022. 

19 SEC. 102. INCREASE IN REFUNDABLE PORTION. 

20 (a) IN GENERAL.—Paragraph (5) of section 24(h) is 

21 amended by redesignating subparagraph (B) as subpara22 graph (C) and by inserting after subparagraph (A) the 

23 following new subparagraph: 

24 ‘‘(B) AMOUNTS FOR 2023, 2024, AND

25 2025.—In the case of a taxable year beginning 


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1 after 2022, subparagraph (A) shall be applied 

2 by substituting for ‘$1,400’— 

3 ‘‘(i) in the case of taxable year 2023, 

4 ‘$1,800’, 

5 ‘‘(ii) in the case of taxable year 2024, 

6 ‘$1,900’, and 

7 ‘‘(iii) in the case of taxable year 2025, 

8 ‘$2,000’.’’. 

9 (b) CONFORMING AMENDMENT.—Subparagraph (C) 

10 of section 24(h)(5), as redesignated by subsection (a), is 

11 amended by inserting ‘‘and before 2023’’ after ‘‘2018’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to taxable years beginning after 

14 December 31, 2022. 

15 SEC. 103. INFLATION OF CREDIT AMOUNT. 

16 (a) IN GENERAL.—Paragraph (2) of section 24(h) is 

17 amended— 

18 (1) by striking ‘‘AMOUNT.—Subsection’’ and in19 serting ‘‘AMOUNT.— 

20 ‘‘(A) IN GENERAL.—Subsection’’, and 

21 (2) by adding at the end the following new sub22 paragraph: 

23 ‘‘(B) ADJUSTMENT FOR INFLATION.—In 

24 the case of a taxable year beginning after 2023, 

25 the $2,000 amounts in subparagraph (A) and 


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1 paragraph (5)(B)(iii) shall each be increased by 

2 an amount equal to— 

3 ‘‘(i) such dollar amount, multiplied by 

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section 1(f)(3) for the cal6 endar year in which the taxable year be7 gins, determined by substituting ‘2022’ for 

8 ‘2016’ in subparagraph (A)(ii) thereof. 

9 If any increase under this clause is not a mul10 tiple of $100, such increase shall be rounded to 

11 the next lowest multiple of $100.’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to taxable years beginning after 

14 December 31, 2023. 

15 SEC. 104. RULE FOR DETERMINATION OF EARNED INCOME. 

16 (a) IN GENERAL.—Paragraph (6) of section 24(h) of 

17 the Internal Revenue Code of 1986 is amended— 

18 (1) by striking ‘‘CREDIT.—Subsection’’ and in19 serting ‘‘CREDIT.— 

20 ‘‘(A) IN GENERAL.—Subsection’’, and 

21 (2) by adding at the end the following new sub22 paragraphs 

23 ‘‘(B) RULE FOR DETERMINATION OF

24 EARNED INCOME.— 


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1 ‘‘(i) IN GENERAL.—In the case of a 

2 taxable year beginning after 2023, if the 

3 earned income of the taxpayer for such 

4 taxable year is less than the earned income 

5 of the taxpayer for the preceding taxable 

6 year, subsection (d)(1)(B)(i) may, at the 

7 election of the taxpayer, be applied by sub8 stituting— 

9 ‘‘(I) the earned income for such 

10 preceding taxable year, for 

11 ‘‘(II) the earned income for the 

12 current taxable year. 

13 ‘‘(ii) APPLICATION TO JOINT RE14 TURNS.—For purposes of clause (i), in the 

15 case of a joint return, the earned income 

16 of the taxpayer for the preceding taxable 

17 year shall be the sum of the earned income 

18 of each spouse for such preceding taxable 

19 year.’’. 

20 (b) ERRORS TREATED AS MATHEMATICAL ER21 RORS.—Paragraph (2) of section 6213(g) of the Internal 

22 Revenue Code of 1986 is amended by striking ‘‘and’’ at 

23 the end of subparagraph (U), by striking the period at 

24 the end of subparagraph (V) and inserting ‘‘, and’’, and 


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1 by inserting after subparagraph (V) the following new sub2 paragraph: 

3 ‘‘(W) in the case of a taxpayer electing the 

4 application of section 24(h)(6)(B) for any tax5 able year, an entry on a return of earned in6 come pursuant to such section which is incon7 sistent with the amount of such earned income 

8 determined by the Secretary for the preceding 

9 taxable year.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2023. 

13 SEC. 105. SPECIAL RULE FOR CERTAIN EARLY-FILED 2023 

14 RETURNS. 

15 In the case of an individual who claims, on the tax16 payer’s return of tax for the first taxable year beginning 

17 after December 31, 2022, a credit under section 24 of the 

18 Internal Revenue Code of 1986 which is determined with19 out regard to the amendments made by sections 101 and 

20 102 of this Act, the Secretary of the Treasury (or the Sec21 retary’s delegate) shall, to the maximum extent prac22 ticable— 

23 (1) redetermine the amount of such credit 

24 (after taking into account such amendments) on the 


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1 basis of the information provided by the taxpayer on 

2 such return, and 

3 (2) to the extent that such redetermination re4 sults in an overpayment of tax, credit or refund such 

5 overpayment as expeditiously as possible. 

6 TITLE II—AMERICAN 

7 INNOVATION AND GROWTH 

8 SEC. 201. DEDUCTION FOR DOMESTIC RESEARCH AND EX9 PERIMENTAL EXPENDITURES. 

10 (a) DELAY OF AMORTIZATION OF DOMESTIC RE11 SEARCH AND EXPERIMENTAL EXPENDITURES.—Section 

12 174 is amended by adding at the end the following new 

13 subsection: 

14 ‘‘(e) SUSPENSION OF APPLICATION OF SECTION TO

15 DOMESTIC RESEARCH AND EXPERIMENTAL EXPENDI16 TURES.—In the case of any domestic research or experi17 mental expenditures (as defined in section 174A(b)), this 

18 section— 

19 ‘‘(1) shall apply to such expenditures paid or 

20 incurred in taxable years beginning after December 

21 31, 2025, and 

22 ‘‘(2) shall not apply to such expenditures paid 

23 or incurred in taxable years beginning on or before 

24 such date.’’. 


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1 (b) REINSTATEMENT OF EXPENSING FOR DOMESTIC

2 RESEARCH AND EXPERIMENTAL EXPENDITURES.—Part 

3 VI of subchapter B of chapter 1 is amended by inserting 

4 after section 174 the following new section: 

5 ‘‘SEC. 174A. TEMPORARY RULES FOR DOMESTIC RESEARCH 

6 AND EXPERIMENTAL EXPENDITURES. 

7 ‘‘(a) TREATMENT AS EXPENSES.—Notwithstanding 

8 section 263, there shall be allowed as a deduction any do9 mestic research or experimental expenditures which are 

10 paid or incurred by the taxpayer during the taxable year. 

11 ‘‘(b) DOMESTIC RESEARCH OR EXPERIMENTAL EX12 PENDITURES.—For purposes of this section, the term ‘do13 mestic research or experimental expenditures’ means re14 search or experimental expenditures paid or incurred by 

15 the taxpayer in connection with the taxpayer’s trade or 

16 business other than such expenditures which are attrib17 utable to foreign research (within the meaning of section 

18 41(d)(4)(F)). 

19 ‘‘(c) AMORTIZATION OF CERTAIN DOMESTIC RE20 SEARCH AND EXPERIMENTAL EXPENDITURES.— 

21 ‘‘(1) IN GENERAL.—At the election of the tax22 payer, made in accordance with regulations or other 

23 guidance provided by the Secretary, in the case of 

24 domestic research or experimental expenditures 

25 which would (but for subsection (a)) be chargeable 


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1 to capital account but not chargeable to property of 

2 a character which is subject to the allowance under 

3 section 167 (relating to allowance for depreciation, 

4 etc.) or section 611 (relating to allowance for deple5 tion), subsection (a) shall not apply and the tax6 payer shall— 

7 ‘‘(A) charge such expenditures to capital 

8 account, and 

9 ‘‘(B) be allowed an amortization deduction 

10 of such expenditures ratably over such period of 

11 not less than 60 months as may be selected by 

12 the taxpayer (beginning with the month in 

13 which the taxpayer first realizes benefits from 

14 such expenditures). 

15 ‘‘(2) TIME FOR AND SCOPE OF ELECTION.—The 

16 election provided by paragraph (1) may be made for 

17 any taxable year, but only if made not later than the 

18 time prescribed by law for filing the return for such 

19 taxable year (including extensions thereof). The 

20 method so elected, and the period selected by the 

21 taxpayer, shall be adhered to in computing taxable 

22 income for the taxable year for which the election is 

23 made and for all subsequent taxable years unless, 

24 with the approval of the Secretary, a change to a 

25 different method (or to a different period) is authorVerDate Sep 11 2014 22:54 Mar 22, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.PCS H7024

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1 ized with respect to part or all of such expenditures. 

2 The election shall not apply to any expenditure paid 

3 or incurred during any taxable year before the tax4 able year for which the taxpayer makes the election. 

5 ‘‘(d) ELECTION TO CAPITALIZE EXPENSES.—In the 

6 case of a taxpayer which elects (at such time and in such 

7 manner as the Secretary may provide) the application of 

8 this subsection, subsections (a) and (c) shall not apply and 

9 domestic research or experimental expenditures shall be 

10 chargeable to capital account. Such election shall not 

11 apply to any expenditure paid or incurred during any tax12 able year before the taxable year for which the taxpayer 

13 makes the election and may be made with respect to part 

14 of the expenditures paid or incurred during any taxable 

15 year only with the approval of the Secretary. 

16 ‘‘(e) SPECIAL RULES.— 

17 ‘‘(1) LAND AND OTHER PROPERTY.—This sec18 tion shall not apply to any expenditure for the acqui19 sition or improvement of land, or for the acquisition 

20 or improvement of property to be used in connection 

21 with the research or experimentation and of a char22 acter which is subject to the allowance under section 

23 167 (relating to allowance for depreciation, etc.) or 

24 section 611 (relating to allowance for depletion); but 

25 for purposes of this section allowances under section 


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1 167, and allowances under section 611, shall be con2 sidered as expenditures. 

3 ‘‘(2) EXPLORATION EXPENDITURES.—This sec4 tion shall not apply to any expenditure paid or in5 curred for the purpose of ascertaining the existence, 

6 location, extent, or quality of any deposit of ore or 

7 other mineral (including oil and gas). 

8 ‘‘(3) SOFTWARE DEVELOPMENT.—For purposes 

9 of this section, any amount paid or incurred in con10 nection with the development of any software shall 

11 be treated as a research or experimental expendi12 ture. 

13 ‘‘(f) TERMINATION.— 

14 ‘‘(1) IN GENERAL.—This section shall not apply 

15 to amounts paid or incurred in taxable years begin16 ning after December 31, 2025. 

17 ‘‘(2) CHANGE IN METHOD OF ACCOUNTING.—In 

18 the case of a taxpayer’s first taxable year beginning 

19 after December 31, 2025, paragraph (1) (and the 

20 corresponding application of section 174) shall be 

21 treated as a change in method of accounting for pur22 poses of section 481 and— 

23 ‘‘(A) such change shall be treated as initi24 ated by the taxpayer, 


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1 ‘‘(B) such change shall be treated as made 

2 with the consent of the Secretary, and 

3 ‘‘(C) such change shall be applied only on 

4 a cut-off basis for any domestic research or ex5 perimental expenditures paid or incurred in tax6 able years beginning after December 31, 2025, 

7 and no adjustment under section 481(a) shall 

8 be made.’’. 

9 (c) COORDINATION WITH CERTAIN OTHER PROVI10 SIONS.— 

11 (1) RESEARCH CREDIT.— 

12 (A) Section 41(d)(1)(A) is amended by in13 serting ‘‘or domestic research or experimental 

14 expenditures under section 174A’’ after ‘‘sec15 tion 174’’. 

16 (B) Section 280C(c)(1) is amended to read 

17 as follows: 

18 ‘‘(1) IN GENERAL.—The domestic research or 

19 experimental expenditures otherwise taken into ac20 count under section 174 or 174A (as the case may 

21 be) shall be reduced by the amount of the credit al22 lowed under section 41(a).’’. 

23 (2) AMT ADJUSTMENT.—Section 56(b)(2) is 

24 amended by striking ‘‘174(a)’’ each place it appears 

25 and inserting ‘‘174A(a)’’. 


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1 (3) OPTIONAL 10-YEAR WRITEOFF.—Section 

2 59(e)(2)(B) is amended by striking ‘‘section 174(a) 

3 (relating to research and experimental expendi4 tures)’’ and inserting ‘‘section 174A(a) (relating to 

5 temporary rules for domestic research and experi6 mental expenditures)’’. 

7 (4) QUALIFIED SMALL ISSUE BONDS.—Section 

8 144(a)(4)(C)(iv) is amended by striking ‘‘174(a)’’ 

9 and inserting ‘‘174A(a)’’. 

10 (5) START-UP EXPENDITURES.—Section 

11 195(c)(1) is amended by striking ‘‘or 174’’ in the 

12 last sentence and inserting ‘‘174, or 174A’’. 

13 (6) CAPITAL EXPENDITURES.— 

14 (A) Section 263(a)(1)(B) is amended by 

15 inserting ‘‘ or 174A’’ after ‘‘174’’. 

16 (B) Section 263A(c)(2) is amended by in17 serting ‘‘or 174A’’ after ‘‘174’’. 

18 (7) ACTIVE BUSINESS COMPUTER SOFTWARE

19 ROYALTIES.—Section 543(d)(4)(A)(i) is amended by 

20 inserting ‘‘174A,’’ after ‘‘174,’’. 

21 (8) SOURCE RULES.—Section 864(g)(2) is 

22 amended in the last sentence— 

23 (A) by striking ‘‘treated as deferred ex24 penses under subsection (b) of section 174’’ and 


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1 inserting ‘‘allowed as an amortization deduction 

2 under section 174(a) or section 174A(c),’’, and 

3 (B) by striking ‘‘such subsection’’ and in4 serting ‘‘such section (as the case may be)’’. 

5 (9) BASIS ADJUSTMENT.—Section 1016(a)(14) 

6 is amended by striking ‘‘deductions as deferred ex7 penses under section 174(b)(1) (relating to research 

8 and experimental expenditures)’’ and inserting ‘‘de9 ductions under section 174 or 174A’’. 

10 (10) SMALL BUSINESS STOCK.—Section 

11 1202(e)(2)(B) is amended by striking ‘‘research and 

12 experimental expenditures under section 174’’ and 

13 inserting ‘‘specified research or experimental expend14 itures under section 174 or domestic research or ex15 perimental expenditures under section 174A’’. 

16 (d) CONFORMING AMENDMENTS.— 

17 (1) Section 13206 of Public Law 115–97 is 

18 amended by striking subsection (b) (relating to 

19 change in method of accounting). 

20 (2) The table of sections for part VI of sub21 chapter B of chapter 1 is amended by inserting after 

22 the item relating to section 174 the following new 

23 item: 

‘‘Sec. 174A. Temporary rules for domestic research and experimental expenditures.’’. 

24 (e) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the amendments made by 

3 this section shall apply to amounts paid or incurred 

4 in taxable years beginning after December 31, 2021. 

5 (2) COORDINATION WITH RESEARCH CREDIT.— 

6 The amendment made by subsection (c)(1)(B) shall 

7 apply to taxable years beginning after December 31, 

8 2022. 

9 (3) REPEAL OF SUPERCEDED CHANGE IN

10 METHOD OF ACCOUNTING RULES.—The amendment 

11 made by subsection (d)(1) shall take effect as if in12 cluded in Public Law 115–97. 

13 (4) NO INFERENCE WITH RESPECT TO COORDI14 NATION WITH RESEARCH CREDIT FOR PRIOR PERI15 ODS.—The amendment made by subsection 

16 (c)(1)(B) shall not be construed to create any infer17 ence with respect to the proper application of section 

18 280C(c) of the Internal Revenue Code of 1986 with 

19 respect to taxable years beginning before January 1, 

20 2023. 

21 (f) TRANSITION RULES.— 

22 (1) IN GENERAL.—Except as otherwise pro23 vided by the Secretary, an election made under sub24 section (c) or (d) of section 174A of the Internal 

25 Revenue Code of 1986 (as added by this section) for 


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1 the taxpayer’s first taxable year beginning after De2 cember 31, 2021, shall not fail to be treated as time3 ly made (or as made on the return) if made during 

4 the 1-year period beginning on the date of the enact5 ment of this Act on an amended return for the tax6 payer’s first taxable year beginning after December 

7 31, 2021, or in such other manner as the Secretary 

8 may provide. 

9 (2) ELECTION REGARDING TREATMENT AS

10 CHANGE IN METHOD OF ACCOUNTING.—In the case 

11 of any taxpayer which (as of the date of the enact12 ment of this Act) had adopted a method of account13 ing provided by section 174 of the Internal Revenue 

14 Code of 1986 (as in effect prior to the amendments 

15 made by this section) for the taxpayer’s first taxable 

16 year beginning after December 31, 2021, and elects 

17 the application of this paragraph— 

18 (A) the amendments made by this section 

19 shall be treated as a change in method of ac20 counting for purposes of section 481 of such 

21 Code, 

22 (B) such change shall be treated as initi23 ated by the taxpayer for the taxpayer’s imme24 diately succeeding taxable year, 


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1 (C) such change shall be treated as made 

2 with the consent of the Secretary, 

3 (D) such change shall be applied on a 

4 modified cut-off basis, taking into account for 

5 purposes of section 481(a) of such Code only 

6 the domestic research or experimental expendi7 tures (as defined in section 174A(b) of such 

8 Code (as added by this section) and determined 

9 by applying the rules of section 174A(e) of such 

10 Code) paid or incurred in the taxpayer’s first 

11 taxable year beginning after December 31, 

12 2021, and not allowed as a deduction in such 

13 taxable year, and 

14 (E) in the case of a taxpayer which elects 

15 the application of this subparagraph, the 

16 amount of such change (as determined under 

17 subparagraph (D)) shall be taken into account 

18 ratably over the 2-taxable-year period beginning 

19 with the taxable year referred to in subpara20 graph (B). 

21 (3) ELECTION REGARDING 10-YEAR WRITE22 OFF.— 

23 (A) IN GENERAL.—Except as otherwise 

24 provided by the Secretary, an eligible taxpayer 

25 which files, during the 1-year period beginning 


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1 on the date of the enactment of this Act, an 

2 amended income tax return for the taxable year 

3 described in subparagraph (B)(ii) may elect the 

4 application of section 59(e) of the Internal Rev5 enue Code of 1986 with respect to qualified ex6 penditures described in section 59(e)(2)(B) of 

7 such Code (as amended by subsection (c)(3)) 

8 with respect to such taxable year. Such election 

9 shall be filed with such amended income tax re10 turn and shall be effective only to the extent 

11 that such election would have been effective if 

12 filed with the original income tax return for 

13 such taxable year (determined after taking into 

14 account the amendment made by subsection 

15 (c)(3)). 

16 (B) ELIGIBLE TAXPAYER.—For purposes 

17 of subparagraph (A), the term ‘‘eligible tax18 payer’’ means any taxpayer which— 

19 (i) does not elect the application of 

20 paragraph (2), and 

21 (ii) filed an income tax return for 

22 such taxpayer’s first taxable year begin23 ning after December 31, 2021, before the 

24 earlier of— 


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1 (I) the due date for such return, 

2 and 

3 (II) the date of the enactment of 

4 this Act. 

5 (4) ELECTION REGARDING COORDINATION

6 WITH RESEARCH CREDIT.—Except as otherwise pro7 vided by the Secretary, an eligible taxpayer (as de8 fined in paragraph (3)(B) without regard to clause 

9 (i) thereof) which files, during the 1-year period be10 ginning on the date of the enactment of this Act, an 

11 amended income tax return for the taxpayer’s first 

12 taxable year beginning after December 31, 2021, 

13 may, notwithstanding subparagraph (C) of section 

14 280C(c)(2) of the Internal Revenue Code of 1986 

15 make, or revoke, on such amended return the elec16 tion under such section for such taxable year. 

17 SEC. 202. EXTENSION OF ALLOWANCE FOR DEPRECIATION, 

18 AMORTIZATION, OR DEPLETION IN DETER19 MINING THE LIMITATION ON BUSINESS IN20 TEREST. 

21 (a) IN GENERAL.—Section 163(j)(8)(A)(v) is amend22 ed by striking ‘‘January 1, 2022’’ and inserting ‘‘January 

23 1, 2026’’. 

24 (b) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the amendment made by 

3 this section shall apply to taxable years beginning 

4 after December 31, 2023. 

5 (2) ELECTION TO APPLY EXTENSION RETRO6 ACTIVELY.—In the case of a taxpayer which elects 

7 (at such time and in such manner as the Secretary 

8 may provide) the application of this paragraph, 

9 paragraph (1) shall be applied by substituting ‘‘De10 cember 31, 2021’’ for ‘‘December 31, 2023’’. 

11 SEC. 203. EXTENSION OF 100 PERCENT BONUS DEPRECIA12 TION. 

13 (a) IN GENERAL.—Section 168(k)(6)(A) is amend14 ed— 

15 (1) in clause (i)— 

16 (A) by striking ‘‘2023’’ and inserting 

17 ‘‘2026’’, and 

18 (B) by adding ‘‘and’’ at the end, and 

19 (2) by striking clauses (ii), (iii), and (iv), and 

20 redesignating clause (v) as clause (ii). 

21 (b) PROPERTY WITH LONGER PRODUCTION PERI22 ODS.—Section 168(k)(6)(B) is amended— 

23 (1) in clause (i)— 

24 (A) by striking ‘‘2024’’ and inserting 

25 ‘‘2027’’, and 


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1 (B) by adding ‘‘and’’ at the end, and 

2 (2) by striking clauses (ii), (iii), and (iv), and 

3 redesignating clause (v) as clause (ii). 

4 (c) PLANTS BEARING FRUITS AND NUTS.—Section 

5 168(k)(6)(C) is amended— 

6 (1) in clause (i)— 

7 (A) by striking ‘‘2023’’ and inserting 

8 ‘‘2026’’, and 

9 (B) by adding ‘‘and’’ at the end, and 

10 (2) by striking clauses (ii), (iii), and (iv), and 

11 redesignating clause (v) as clause (ii). 

12 (d) EFFECTIVE DATES.— 

13 (1) IN GENERAL.—Except as otherwise pro14 vided in this subsection, the amendments made by 

15 this section shall apply to property placed in service 

16 after December 31, 2022. 

17 (2) PLANTS BEARING FRUITS AND NUTS.—The 

18 amendments made by subsection (c) shall apply to 

19 specified plants planted or grafted after December 

20 31, 2022. 

21 SEC. 204. INCREASE IN LIMITATIONS ON EXPENSING OF DE22 PRECIABLE BUSINESS ASSETS. 

23 (a) IN GENERAL.—Section 179(b) is amended— 

24 (1) by striking ‘‘$1,000,000’’ in paragraph (1) 

25 and inserting ‘‘$1,290,000’’, and 


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1 (2) by striking ‘‘$2,500,000’’ in paragraph (2) 

2 and inserting ‘‘$3,220,000’’. 

3 (b) INFLATION ADJUSTMENT.—Section 179(b)(6) is 

4 amended— 

5 (1) by striking ‘‘2018’’ and inserting ‘‘2024 

6 (2018 in the case of the dollar amount in paragraph 

7 (5)(A))’’, and 

8 (2) by striking ‘‘ ‘calendar year 2017’’ and in9 serting ‘‘ ‘calendar year 2024’ (‘calendar year 2017’ 

10 in the case of the dollar amount in paragraph 

11 (5)(A))’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to property placed in service in 

14 taxable years beginning after December 31, 2023. 

15 TITLE III—INCREASING GLOBAL 

16 COMPETITIVENESS 

17 Subtitle A—United States-Taiwan 

18 Expedited Double-Tax Relief Act 

19 SEC. 301. SHORT TITLE. 

20 This subtitle may be cited as the ‘‘United States-Tai21 wan Expedited Double-Tax Relief Act’’. 


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1 SEC. 302. SPECIAL RULES FOR TAXATION OF CERTAIN 

2 RESIDENTS OF TAIWAN. 

3 (a) IN GENERAL.—Subpart D of part II of sub4 chapter N of chapter 1 is amended by inserting after sec5 tion 894 the following new section: 

6 ‘‘SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF 

7 TAIWAN. 

8 ‘‘(a) CERTAIN INCOME FROM UNITED STATES

9 SOURCES.— 

10 ‘‘(1) INTEREST, DIVIDENDS, AND ROYALTIES, 

11 ETC.— 

12 ‘‘(A) IN GENERAL.—In the case of interest 

13 (other than original issue discount), dividends, 

14 royalties, amounts described in section 

15 871(a)(1)(C), and gains described in section 

16 871(a)(1)(D) received by or paid to a qualified 

17 resident of Taiwan— 

18 ‘‘(i) sections 871(a), 881(a), 1441(a), 

19 1441(c)(5), and 1442(a) shall each be ap20 plied by substituting ‘the applicable per21 centage (as defined in section 

22 894A(a)(1)(C))’ for ‘30 percent’ each place 

23 it appears, and 

24 ‘‘(ii) sections 871(a), 881(a), and 

25 1441(c)(1) shall each be applied by sub26 stituting ‘a United States permanent esVerDate Sep 11 2014 22:54 Mar 22, 2024 Jkt 049200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.PCS H7024

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1 tablishment of a qualified resident of Tai2 wan’ for ‘a trade or business within the 

3 United States’ each place it appears. 

4 ‘‘(B) EXCEPTIONS.— 

5 ‘‘(i) IN GENERAL.—Subparagraph (A) 

6 shall not apply to— 

7 ‘‘(I) any dividend received from 

8 or paid by a real estate investment 

9 trust which is not a qualified REIT 

10 dividend, 

11 ‘‘(II) any amount subject to sec12 tion 897, 

13 ‘‘(III) any amount received from 

14 or paid by an expatriated entity (as 

15 defined in section 7874(a)(2)) to a 

16 foreign related person (as defined in 

17 section 7874(d)(3)), and 

18 ‘‘(IV) any amount which is in19 cluded in income under section 860C 

20 to the extent that such amount does 

21 not exceed an excess inclusion with re22 spect to a REMIC. 

23 ‘‘(ii) QUALIFIED REIT DIVIDEND.— 

24 For purposes of clause (i)(I), the term 

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1 dend received from or paid by a real estate 

2 investment trust if such dividend is paid 

3 with respect to a class of shares that is 

4 publicly traded and the recipient of the 

5 dividend is a person who holds an interest 

6 in any class of shares of the real estate in7 vestment trust of not more than 5 percent. 

8 ‘‘(C) APPLICABLE PERCENTAGE.—For 

9 purposes of applying subparagraph (A)(i)— 

10 ‘‘(i) IN GENERAL.—Except as pro11 vided in clause (ii), the term ‘applicable 

12 percentage’ means 10 percent. 

13 ‘‘(ii) SPECIAL RULES FOR DIVI14 DENDS.— In the case of any dividend in 

15 respect of stock received by or paid to a 

16 qualified resident of Taiwan, the applicable 

17 percentage shall be 15 percent (10 percent 

18 in the case of a dividend which meets the 

19 requirements of subparagraph (D) and is 

20 received by or paid to an entity taxed as 

21 a corporation in Taiwan). 

22 ‘‘(D) REQUIREMENTS FOR LOWER DIVI23 DEND RATE.— 

24 ‘‘(i) IN GENERAL.—The requirements 

25 of this subparagraph are met with respect 


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1 to any dividend in respect of stock in a 

2 corporation if, at all times during the 12- 

3 month period ending on the date such 

4 stock becomes ex-dividend with respect to 

5 such dividend— 

6 ‘‘(I) the dividend is derived by a 

7 qualified resident of Taiwan, and 

8 ‘‘(II) such qualified resident of 

9 Taiwan has held directly at least 10 

10 percent (by vote and value) of the 

11 total outstanding shares of stock in 

12 such corporation. 

13 For purposes of subclause (II), a person 

14 shall be treated as directly holding a share 

15 of stock during any period described in the 

16 preceding sentence if the share was held by 

17 a corporation from which such person later 

18 acquired that share and such corporation 

19 was, at the time the share was acquired, 

20 both a connected person to such person 

21 and a qualified resident of Taiwan. 

22 ‘‘(ii) EXCEPTION FOR RICS AND

23 REITS.—Notwithstanding clause (i), the re24 quirements of this subparagraph shall not 

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1 dend paid by a regulated investment com2 pany or a real estate investment trust. 

3 ‘‘(2) QUALIFIED WAGES.— 

4 ‘‘(A) IN GENERAL.—No tax shall be im5 posed under this chapter (and no amount shall 

6 be withheld under section 1441(a) or chapter 

7 24) with respect to qualified wages paid to a 

8 qualified resident of Taiwan who— 

9 ‘‘(i) is not a resident of the United 

10 States (determined without regard to sub11 section (c)(3)(E)), or 

12 ‘‘(ii) is employed as a member of the 

13 regular component of a ship or aircraft op14 erated in international traffic. 

15 ‘‘(B) QUALIFIED WAGES.— 

16 ‘‘(i) IN GENERAL.—The term ‘quali17 fied wages’ means wages, salaries, or simi18 lar remunerations with respect to employ19 ment involving the performance of personal 

20 services within the United States which— 

21 ‘‘(I) are paid by (or on behalf of) 

22 any employer other than a United 

23 States person, and 

24 ‘‘(II) are not borne by a United 

25 States permanent establishment of 


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1 any person other than a United States 

2 person. 

3 ‘‘(ii) EXCEPTIONS.—Such term shall 

4 not include directors’ fees, income derived 

5 as an entertainer or athlete, income de6 rived as a student or trainee, pensions, 

7 amounts paid with respect to employment 

8 with the United States, any State (or polit9 ical subdivision thereof), or any possession 

10 of the United States (or any political sub11 division thereof), or other amounts speci12 fied in regulations or guidance under sub13 section (f)(1)(F). 

14 ‘‘(3) INCOME DERIVED FROM ENTERTAINMENT

15 OR ATHLETIC ACTIVITIES.— 

16 ‘‘(A) IN GENERAL.—No tax shall be im17 posed under this chapter (and no amount shall 

18 be withheld under section 1441(a) or chapter 

19 24) with respect to income derived by an enter20 tainer or athlete who is a qualified resident of 

21 Taiwan from personal activities as such per22 formed in the United States if the aggregate 

23 amount of gross receipts from such activities 

24 for the taxable year do not exceed $30,000. 


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1 ‘‘(B) EXCEPTION.—Subparagraph (A) 

2 shall not apply with respect to— 

3 ‘‘(i) income which is qualified wages 

4 (as defined in paragraph (2)(B), deter5 mined without regard to clause (ii) there6 of), or 

7 ‘‘(ii) income which is effectively con8 nected with a United States permanent es9 tablishment. 

10 ‘‘(b) INCOME CONNECTED WITH A UNITED STATES

11 PERMANENT ESTABLISHMENT OF A QUALIFIED RESI12 DENT OF TAIWAN.— 

13 ‘‘(1) IN GENERAL.— 

14 ‘‘(A) IN GENERAL.—In lieu of applying 

15 sections 871(b) and 882, a qualified resident of 

16 Taiwan that carries on a trade or business 

17 within the United States through a United 

18 States permanent establishment shall be taxable 

19 as provided in section 1, 11, 55, or 59A, on its 

20 taxable income which is effectively connected 

21 with such permanent establishment. 

22 ‘‘(B) DETERMINATION OF TAXABLE IN23 COME.—In determining taxable income for pur24 poses of paragraph (1), gross income includes 


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1 only gross income which is effectively connected 

2 with the permanent establishment. 

3 ‘‘(2) TREATMENT OF DISPOSITIONS OF UNITED

4 STATES REAL PROPERTY.—In the case of a qualified 

5 resident of Taiwan, section 897(a) shall be applied— 

6 ‘‘(A) by substituting ‘carried on a trade or 

7 business within the United States through a 

8 United States permanent establishment’ for 

9 ‘were engaged in a trade or business within the 

10 United States’, and 

11 ‘‘(B) by substituting ‘such United States 

12 permanent establishment’ for ‘such trade or 

13 business’. 

14 ‘‘(3) TREATMENT OF BRANCH PROFITS

15 TAXES.—In the case of any corporation which is a 

16 qualified resident of Taiwan, section 884 shall be ap17 plied— 

18 ‘‘(A) by substituting ‘10 percent’ for ‘30 

19 percent ’ in subsection (a) thereof, and 

20 ‘‘(B) by substituting ‘a United States per21 manent establishment of a qualified resident of 

22 Taiwan’ for ‘the conduct of a trade or business 

23 within the United States’ in subsection (d)(1) 

24 thereof. 


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1 ‘‘(4) SPECIAL RULE WITH RESPECT TO INCOME

2 DERIVED FROM CERTAIN ENTERTAINMENT OR ATH3 LETIC ACTIVITIES.— 

4 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

5 not apply to the extent that the income is de6 rived— 

7 ‘‘(i) in respect of entertainment or 

8 athletic activities performed in the United 

9 States, and 

10 ‘‘(ii) by a qualified resident of Taiwan 

11 who is not the entertainer or athlete per12 forming such activities. 

13 ‘‘(B) EXCEPTION.—Subparagraph (A) 

14 shall not apply if the person described in sub15 paragraph (A)(ii) is contractually authorized to 

16 designate the individual who is to perform such 

17 activities. 

18 ‘‘(5) SPECIAL RULE WITH RESPECT TO CER19 TAIN AMOUNTS.—Paragraph (1) shall not apply to 

20 any income which is wages, salaries, or similar re21 muneration with respect to employment or with re22 spect to any amount which is described in subsection 

23 (a)(2)(B)(ii). 

24 ‘‘(c) QUALIFIED RESIDENT OF TAIWAN.—For pur25 poses of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified resi2 dent of Taiwan’ means any person who— 

3 ‘‘(A) is liable to tax under the laws of Tai4 wan by reason of such person’s domicile, resi5 dence, place of management, place of incorpora6 tion, or any similar criterion, 

7 ‘‘(B) is not a United States person (deter8 mined without regard to paragraph (3)(E)), 

9 and 

10 ‘‘(C) in the case of an entity taxed as a 

11 corporation in Taiwan, meets the requirements 

12 of paragraph (2). 

13 ‘‘(2) LIMITATION ON BENEFITS FOR COR14 PORATE ENTITIES OF TAIWAN.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graphs (E) and (F), an entity meets the re17 quirements of this paragraph only if it— 

18 ‘‘(i) meets the ownership and income 

19 requirements of subparagraph (B), 

20 ‘‘(ii) meets the publicly traded re21 quirements of subparagraph (C), or 

22 ‘‘(iii) meets the qualified subsidiary 

23 requirements of subparagraph (D). 


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1 ‘‘(B) OWNERSHIP AND INCOME REQUIRE2 MENTS.—The requirements of this subpara3 graph are met for an entity if— 

4 ‘‘(i) at least 50 percent (by vote and 

5 value) of the total outstanding shares of 

6 stock in such entity are owned directly or 

7 indirectly by qualified residents of Taiwan, 

8 and 

9 ‘‘(ii) less than 50 percent of such enti10 ty’s gross income (and in the case of an 

11 entity that is a member of a tested group, 

12 less than 50 percent of the tested group’s 

13 gross income) is paid or accrued, directly 

14 or indirectly, in the form of payments that 

15 are deductible for purposes of the income 

16 taxes imposed by Taiwan, to persons who 

17 are not— 

18 ‘‘(I) qualified residents of Tai19 wan, or 

20 ‘‘(II) United States persons who 

21 meet such requirements with respect 

22 to the United States as determined by 

23 the Secretary to be equivalent to the 

24 requirements of this subsection (deter25 mined without regard to paragraph 


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1 (1)(B)) with respect to residents of 

2 Taiwan. 

3 ‘‘(C) PUBLICLY TRADED REQUIRE4 MENTS.—An entity meets the requirements of 

5 this subparagraph if— 

6 ‘‘(i) the principal class of its shares 

7 (and any disproportionate class of shares) 

8 of such entity are primarily and regularly 

9 traded on an established securities market 

10 in Taiwan, or 

11 ‘‘(ii) the primary place of manage12 ment and control of the entity is in Taiwan 

13 and all classes of its outstanding shares 

14 described in clause (i) are regularly traded 

15 on an established securities market in Tai16 wan. 

17 ‘‘(D) QUALIFIED SUBSIDIARY REQUIRE18 MENTS.—An entity meets the requirement of 

19 this subparagraph if— 

20 ‘‘(i) at least 50 percent (by vote and 

21 value) of the total outstanding shares of 

22 the stock of such entity are owned directly 

23 or indirectly by 5 or fewer entities— 

24 ‘‘(I) which meet the requirements 

25 of subparagraph (C), or 


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1 ‘‘(II) which are United States 

2 persons the principal class of the 

3 shares (and any disproportionate class 

4 of shares) of which are primarily and 

5 regularly traded on an established se6 curities market in the United States, 

7 and 

8 ‘‘(ii) the entity meets the require9 ments of clause (ii) of subparagraph (B). 

10 ‘‘(E) ONLY INDIRECT OWNERSHIP

11 THROUGH QUALIFYING INTERMEDIARIES

12 COUNTED.— 

13 ‘‘(i) IN GENERAL.—Stock in an entity 

14 owned by a person indirectly through 1 or 

15 more other persons shall not be treated as 

16 owned by such person in determining 

17 whether the person meets the requirements 

18 of subparagraph (B)(i) or (D)(i) unless all 

19 such other persons are qualifying inter20 mediate owners. 

21 ‘‘(ii) QUALIFYING INTERMEDIATE

22 OWNERS.—The term ‘qualifying inter23 mediate owner’ means a person that is— 

24 ‘‘(I) a qualified resident of Tai25 wan, or 


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1 ‘‘(II) a resident of any other for2 eign country (other than a foreign 

3 country that is a foreign country of 

4 concern) that has in effect a com5 prehensive convention with the United 

6 States for the avoidance of double tax7 ation. 

8 ‘‘(iii) SPECIAL RULE FOR QUALIFIED

9 SUBSIDIARIES.—For purposes of applying 

10 subparagraph (D)(i), the term ‘qualifying 

11 intermediate owner’ shall include any per12 son who is a United States person who 

13 meets such requirements with respect to 

14 the United States as determined by the 

15 Secretary to be equivalent to the require16 ments of this subsection (determined with17 out regard to paragraph (1)(B)) with re18 spect to residents of Taiwan. 

19 ‘‘(F) CERTAIN PAYMENTS NOT IN20 CLUDED.—In determining whether the require21 ments of subparagraph (B)(ii) or (D)(ii) are 

22 met with respect to an entity, the following pay23 ments shall not be taken into account: 


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1 ‘‘(i) Arm’s-length payments by the en2 tity in the ordinary course of business for 

3 services or tangible property. 

4 ‘‘(ii) In the case of a tested group, 

5 intra-group transactions. 

6 ‘‘(3) DUAL RESIDENTS.— 

7 ‘‘(A) RULES FOR DETERMINATION OF STA8 TUS.— 

9 ‘‘(i) IN GENERAL.—An individual who 

10 is an applicable dual resident and who is 

11 described in subparagraph (B), (C), or (D) 

12 shall be treated as a qualified resident of 

13 Taiwan. 

14 ‘‘(ii) APPLICABLE DUAL RESIDENT.— 

15 For purposes of this paragraph, the term 

16 ‘applicable dual resident’ means an indi17 vidual who— 

18 ‘‘(I) is not a United States cit19 izen, 

20 ‘‘(II) is a resident of the United 

21 States (determined without regard to 

22 subparagraph (E)), and 

23 ‘‘(III) would be a qualified resi24 dent of Taiwan but for paragraph 

25 (1)(B). 


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1 ‘‘(B) PERMANENT HOME.—An individual 

2 is described in this subparagraph if such indi3 vidual— 

4 ‘‘(i) has a permanent home available 

5 to such individual in Taiwan, and 

6 ‘‘(ii) does not have a permanent home 

7 available to such individual in the United 

8 States. 

9 ‘‘(C) CENTER OF VITAL INTERESTS.—An 

10 individual is described in this subparagraph if— 

11 ‘‘(i) such individual has a permanent 

12 home available to such individual in both 

13 Taiwan and the United States, and 

14 ‘‘(ii) such individual’s personal and 

15 economic relations (center of vital inter16 ests) are closer to Taiwan than to the 

17 United States. 

18 ‘‘(D) HABITUAL ABODE.—An individual is 

19 described in this subparagraph if— 

20 ‘‘(i) such individual— 

21 ‘‘(I) does not have a permanent 

22 home available to such individual in 

23 either Taiwan or the United States, or 

24 ‘‘(II) has a permanent home 

25 available to such individual in both 


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1 Taiwan and the United States but 

2 such individual’s center of vital inter3 ests under subparagraph (C)(ii) can4 not be determined, and 

5 ‘‘(ii) such individual has a habitual 

6 abode in Taiwan and not the United 

7 States. 

8 ‘‘(E) UNITED STATES TAX TREATMENT OF

9 QUALIFIED RESIDENT OF TAIWAN.—Notwith10 standing section 7701, an individual who is 

11 treated as a qualified resident of Taiwan by 

12 reason of this paragraph for all or any portion 

13 of a taxable year shall not be treated as a resi14 dent of the United States for purposes of com15 puting such individual’s United States income 

16 tax liability for such taxable year or portion 

17 thereof. 

18 ‘‘(4) RULES OF SPECIAL APPLICATION.— 

19 ‘‘(A) DIVIDENDS.—For purposes of apply20 ing this section to any dividend, paragraph 

21 (2)(D) shall be applied without regard to clause 

22 (ii) thereof. 

23 ‘‘(B) ITEMS OF INCOME EMANATING FROM

24 AN ACTIVE TRADE OR BUSINESS IN TAIWAN.— 

25 For purposes of this section— 


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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 the preceding paragraphs of this sub3 section, if an entity taxed as a corporation 

4 in Taiwan is not a qualified resident of 

5 Taiwan but meets the requirements of sub6 paragraphs (A) and (B) of paragraph (1), 

7 any qualified item of income such entity 

8 derived from the United States shall be 

9 treated as income of a qualified resident of 

10 Taiwan. 

11 ‘‘(ii) QUALIFIED ITEMS OF INCOME.— 

12 ‘‘(I) IN GENERAL.—The term 

13 ‘qualified item of income’ means any 

14 item of income which emanates from, 

15 or is incidental to, the conduct of an 

16 active trade or business in Taiwan 

17 (other than operating as a holding 

18 company, providing overall supervision 

19 or administration of a group of com20 panies, providing group financing, or 

21 making or managing investments (un22 less such making or managing invest23 ments is carried on by a bank, insur24 ance company, or registered securities 


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1 dealer in the ordinary course of its 

2 business as such)). 

3 ‘‘(II) SUBSTANTIAL ACTIVITY RE4 QUIREMENT.—An item of income 

5 which is derived from a trade or busi6 ness conducted in the United States 

7 or from a connected person shall be a 

8 qualified item of income only if the 

9 trade or business activity conducted in 

10 Taiwan to which the item is related is 

11 substantial in relation to the same or 

12 a complementary trade or business ac13 tivity carried on in the United States. 

14 For purposes of applying this sub15 clause, activities conducted by persons 

16 that are connected to the entity de17 scribed in clause (i) shall be deemed 

18 to be conducted by such entity. 

19 ‘‘(iii) EXCEPTION.—This subpara20 graph shall not apply to any item of in21 come derived by an entity if at least 50 

22 percent (by vote or value) of such entity is 

23 owned (directly or indirectly) or controlled 

24 by residents of a foreign country of con25 cern. 


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1 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 

2 For purposes of this section— 

3 ‘‘(1) UNITED STATES PERMANENT ESTABLISH4 MENT.— 

5 ‘‘(A) IN GENERAL.—The term ‘United 

6 States permanent establishment’ means, with 

7 respect to a qualified resident of Taiwan, a per8 manent establishment of such resident which is 

9 within the United States. 

10 ‘‘(B) SPECIAL RULE.—The determination 

11 of whether there is a permanent establishment 

12 of a qualified resident of Taiwan within the 

13 United States shall be made without regard to 

14 whether an entity which is taxed as a corpora15 tion in Taiwan and which is a qualified resident 

16 of Taiwan controls or is controlled by— 

17 ‘‘(i) a domestic corporation, or 

18 ‘‘(ii) any other person that carries on 

19 business in the United States (whether 

20 through a permanent establishment or oth21 erwise). 

22 ‘‘(2) PERMANENT ESTABLISHMENT.— 

23 ‘‘(A) IN GENERAL.—The term ‘permanent 

24 establishment’ means a fixed place of business 


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1 through which a trade or business is wholly or 

2 partly carried on. Such term shall include— 

3 ‘‘(i) a place of management, 

4 ‘‘(ii) a branch, 

5 ‘‘(iii) an office, 

6 ‘‘(iv) a factory, 

7 ‘‘(v) a workshop, and 

8 ‘‘(vi) a mine, an oil or gas well, a 

9 quarry, or any other place of extraction of 

10 natural resources. 

11 ‘‘(B) SPECIAL RULES FOR CERTAIN TEM12 PORARY PROJECTS.— 

13 ‘‘(i) IN GENERAL.—A building site or 

14 construction or installation project, or an 

15 installation or drilling rig or ship used for 

16 the exploration or exploitation of the sea 

17 bed and its subsoil and their natural re18 sources, constitutes a permanent establish19 ment only if it lasts, or the activities of the 

20 rig or ship lasts, for more than 12 months. 

21 ‘‘(ii) DETERMINATION OF 12-MONTH

22 PERIOD.—For purposes of clause (i), the 

23 period over which a building site or con24 struction or installation project of a person 

25 lasts shall include any period of more than 


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1 30 days during which such person does not 

2 carry on activities at such building site or 

3 construction or installation project but 

4 connected activities are carried on at such 

5 building site or construction or installation 

6 project by one or more connected persons. 

7 ‘‘(C) HABITUAL EXERCISE OF CONTRACT

8 AUTHORITY TREATED AS PERMANENT ESTAB9 LISHMENT.—Notwithstanding subparagraphs 

10 (A) and (B), where a person (other than an 

11 agent of an independent status to whom sub12 paragraph (D)(ii) applies) is acting on behalf of 

13 a trade or business of a qualified resident of 

14 Taiwan and has and habitually exercises an au15 thority to conclude contracts that are binding 

16 on the trade or business, that trade or business 

17 shall be deemed to have a permanent establish18 ment in the country in which such authority is 

19 exercised in respect of any activities that the 

20 person undertakes for the trade or business, un21 less the activities of such person are limited to 

22 those described in subparagraph (D)(i) that, if 

23 exercised through a fixed place of business, 

24 would not make this fixed place of business a 


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1 permanent establishment under the provisions 

2 of that subparagraph. 

3 ‘‘(D) EXCLUSIONS.— 

4 ‘‘(i) IN GENERAL.—Notwithstanding 

5 subparagraphs (A) and (B), the term ‘per6 manent establishment’ shall not include— 

7 ‘‘(I) the use of facilities solely for 

8 the purpose of storage, display, or de9 livery of goods or merchandise belong10 ing to the trade or business, 

11 ‘‘(II) the maintenance of a stock 

12 of goods or merchandise belonging to 

13 the trade or business solely for the 

14 purpose of storage, display, or deliv15 ery, 

16 ‘‘(III) the maintenance of a stock 

17 of goods or merchandise belonging to 

18 the trade or business solely for the 

19 purpose of processing by another 

20 trade or business, 

21 ‘‘(IV) the maintenance of a fixed 

22 place of business solely for the pur23 pose of purchasing goods or merchan24 dise, or of collecting information, for 

25 the trade or business, 


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1 ‘‘(V) the maintenance of a fixed 

2 place of business solely for the pur3 pose of carrying on, for the trade or 

4 business, any other activity of a pre5 paratory or auxiliary character, or 

6 ‘‘(VI) the maintenance of a fixed 

7 place of business solely for any com8 bination of the activities mentioned in 

9 subclauses (I) through (V), provided 

10 that the overall activity of the fixed 

11 place of business resulting from this 

12 combination is of a preparatory or 

13 auxiliary character. 

14 ‘‘(ii) BROKERS AND OTHER INDE15 PENDENT AGENTS.—A trade or business 

16 shall not be considered to have a perma17 nent establishment in a country merely be18 cause it carries on business in such coun19 try through a broker, general commission 

20 agent, or any other agent of an inde21 pendent status, provided that such persons 

22 are acting in the ordinary course of their 

23 business as independent agents. 

24 ‘‘(3) TESTED GROUP.—The term ‘tested group’ 

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1 poration in Taiwan, such entity and any other entity 

2 taxed as a corporation in Taiwan that— 

3 ‘‘(A) participates as a member with such 

4 entity in a tax consolidation, fiscal unity, or 

5 similar regime that requires members of the 

6 group to share profits or losses, or 

7 ‘‘(B) shares losses with such entity pursu8 ant to a group relief or other loss sharing re9 gime. 

10 ‘‘(4) CONNECTED PERSON.—Two persons shall 

11 be ‘connected persons’ if one owns, directly or indi12 rectly, at least 50 percent of the interests in the 

13 other (or, in the case of a corporation, at least 50 

14 percent of the aggregate vote and value of the cor15 poration’s shares) or another person owns, directly 

16 or indirectly, at least 50 percent of the interests (or, 

17 in the case of a corporation, at least 50 percent of 

18 the aggregate vote and value of the corporation’s 

19 shares) in each person. In any case, a person shall 

20 be connected to another if, based on all the relevant 

21 facts and circumstances, one has control of the other 

22 or both are under the control of the same person or 

23 persons. 

24 ‘‘(5) FOREIGN COUNTRY OF CONCERN.—The 

25 term ‘foreign country of concern’ has the meaning 


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1 given such term under paragraph (7) of section 

2 9901 of the William M. (Mac) Thornberry National 

3 Defense Authorization Act for Fiscal Year 2021 (15 

4 U.S.C. 4651(7)), as added by section 103(a)(4) of 

5 the CHIPS Act of 2022). 

6 ‘‘(6) PARTNERSHIPS; BENEFICIARIES OF ES7 TATES AND TRUSTS.—For purposes of this section— 

8 ‘‘(A) a qualified resident of Taiwan which 

9 is a partner of a partnership which carries on 

10 a trade or business within the United States 

11 through a United States permanent establish12 ment shall be treated as carrying on such trade 

13 or business through such permanent establish14 ment, and 

15 ‘‘(B) a qualified resident of Taiwan which 

16 is a beneficiary of an estate or trust which car17 ries on a trade or business within the United 

18 States through a United States permanent es19 tablishment shall be treated as carrying on such 

20 trade or business through such permanent es21 tablishment. 

22 ‘‘(7) DENIAL OF BENEFITS FOR CERTAIN PAY23 MENTS THROUGH HYBRID ENTITIES.—For purposes 

24 of this section, rules similar to the rules of section 

25 894(c) shall apply. 


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1 ‘‘(e) APPLICATION.— 

2 ‘‘(1) IN GENERAL.—This section shall not apply 

3 to any period unless the Secretary has determined 

4 that Taiwan has provided benefits to United States 

5 persons for such period that are reciprocal to the 

6 benefits provided to qualified residents of Taiwan 

7 under this section. 

8 ‘‘(2) PROVISION OF RECIPROCITY.—The Presi9 dent or his designee is authorized to exchange let10 ters, enter into an agreement, or take other nec11 essary and appropriate steps relative to Taiwan for 

12 the reciprocal provision of the benefits described in 

13 this section. 

14 ‘‘(f) REGULATIONS OR OTHER GUIDANCE.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall issue 

16 such regulations or other guidance as may be nec17 essary or appropriate to carry out the provisions of 

18 this section, including such regulations or guidance 

19 for— 

20 ‘‘(A) determining— 

21 ‘‘(i) what constitutes a United States 

22 permanent establishment of a qualified 

23 resident of Taiwan, and 


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1 ‘‘(ii) income that is effectively con2 nected with such a permanent establish3 ment, 

4 ‘‘(B) preventing the abuse of the provisions 

5 of this section by persons who are not (or who 

6 should not be treated as) qualified residents of 

7 Taiwan, 

8 ‘‘(C) requirements for record keeping and 

9 reporting, 

10 ‘‘(D) rules to assist withholding agents or 

11 employers in determining whether a foreign per12 son is a qualified resident of Taiwan for pur13 poses of determining whether withholding or re14 porting is required for a payment (and, if with15 holding is required, whether it should be applied 

16 at a reduced rate), 

17 ‘‘(E) the application of subsection 

18 (a)(1)(D)(i) to stock held by predecessor own19 ers, 

20 ‘‘(F) determining what amounts are to be 

21 treated as qualified wages for purposes of sub22 section (a)(2), 

23 ‘‘(G) determining the amounts to which 

24 subsection (a)(3) applies, 


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1 ‘‘(H) defining established securities market 

2 for purposes of subsection (c), 

3 ‘‘(I) the application of the rules of sub4 section (c)(4)(B), 

5 ‘‘(J) the application of subsection (d)(6) 

6 and section 1446, 

7 ‘‘(K) determining ownership interests held 

8 by residents of a foreign country of concern, 

9 and 

10 ‘‘(L) determining the starting and ending 

11 dates for periods with respect to the application 

12 of this section under subsection (e), which may 

13 be separate dates for taxes withheld at the 

14 source and other taxes. 

15 ‘‘(2) REGULATIONS TO BE CONSISTENT WITH

16 MODEL TREATY.—Any regulations or other guidance 

17 issued under this section shall, to the extent prac18 tical, be consistent with the provisions of the United 

19 States model income tax convention dated February 

20 7, 2016.’’. 

21 (b) CONFORMING AMENDMENT TO WITHHOLDING

22 TAX.—Subchapter A of chapter 3 is amended by adding 

23 at the end the following new section: 


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1 ‘‘SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF 

2 TAIWAN. 

3 ‘‘For reduced rates of withholding for certain resi4 dents of Taiwan, see section 894A.’’. 

5 (c) CLERICAL AMENDMENTS.— 

6 (1) The table of sections for subpart D of part 

7 II of subchapter N of chapter 1 is amended by in8 serting after the item relating to section 894 the fol9 lowing new item: 

‘‘Sec. 894A. Special rules for qualified residents of Taiwan.’’. 

10 (2) The table of sections for subchapter A of 

11 chapter 3 is amended by adding at the end the fol12 lowing new item: 

‘‘Sec. 1447. Withholding for qualified residents of Taiwan.’’. 

13 Subtitle B—United States-Taiwan 

14 Tax Agreement Authorization Act 

15 SEC. 311. SHORT TITLE. 

16 This subtitle may be cited as the ‘‘United States-Tai17 wan Tax Agreement Authorization Act’’. 

18 SEC. 312. DEFINITIONS. 

19 In this subtitle: 

20 (1) AGREEMENT.—The term ‘‘Agreement’’ 

21 means the tax agreement authorized by section 

22 313(a). 


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1 (2) APPROPRIATE CONGRESSIONAL COMMIT2 TEES.—The term ‘‘appropriate congressional com3 mittees’’ means— 

4 (A) the Committee on Foreign Relations 

5 and the Committee on Finance of the Senate; 

6 and 

7 (B) the Committee on Ways and Means of 

8 the House of Representatives. 

9 (3) APPROVAL LEGISLATION.—The term ‘‘ap10 proval legislation’’ means legislation that approves 

11 the Agreement. 

12 (4) IMPLEMENTING LEGISLATION.—The term 

13 ‘‘implementing legislation’’ means legislation that 

14 makes any changes to the Internal Revenue Code of 

15 1986 necessary to implement the Agreement. 

16 SEC. 313. AUTHORIZATION TO NEGOTIATE AND ENTER 

17 INTO AGREEMENT. 

18 (a) IN GENERAL.—Subsequent to a determination 

19 under section 894A(e)(1) of the Internal Revenue Code 

20 of 1986 (as added by the United States-Taiwan Expedited 

21 Double-Tax Relief Act), the President is authorized to ne22 gotiate and enter into a tax agreement relative to Taiwan. 

23 (b) ELEMENTS OF AGREEMENT.— 

24 (1) CONFORMITY WITH BILATERAL INCOME TAX

25 CONVENTIONS.—The President shall ensure that— 


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1 (A) any provisions included in the Agree2 ment conform with provisions customarily con3 tained in United States bilateral income tax 

4 conventions, as exemplified by the 2016 United 

5 States Model Income Tax Convention; and 

6 (B) the Agreement does not include ele7 ments outside the scope of the 2016 United 

8 States Model Income Tax Convention. 

9 (2) INCORPORATION OF TAX AGREEMENTS AND

10 LAWS.—Notwithstanding paragraph (1), the Agree11 ment may incorporate and restate provisions of any 

12 agreement, or existing United States law, addressing 

13 double taxation for residents of the United States 

14 and Taiwan. 

15 (3) AUTHORITY.—The Agreement shall include 

16 the following statement: ‘‘The Agreement is entered 

17 into pursuant to the United States-Taiwan Tax 

18 Agreement Authorization Act.’’ 

19 (4) ENTRY INTO FORCE.—The Agreement shall 

20 include a provision conditioning entry into force 

21 upon— 

22 (A) enactment of approval legislation and 

23 implementing legislation pursuant to section 

24 317; and 


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1 (B) confirmation by the Secretary of the 

2 Treasury that the relevant authority in Taiwan 

3 has approved and taken appropriate steps re4 quired to implement the Agreement. 

5 SEC. 314. CONSULTATIONS WITH CONGRESS. 

6 (a) NOTIFICATION UPON COMMENCEMENT OF NEGO7 TIATIONS.—The President shall provide written notifica8 tion to the appropriate congressional committees of the 

9 commencement of negotiations between the United States 

10 and Taiwan on the Agreement at least 15 calendar days 

11 before commencing such negotiations. 

12 (b) CONSULTATIONS DURING NEGOTIATIONS.— 

13 (1) BRIEFINGS.—Not later than 90 days after 

14 commencement of negotiations with respect to the 

15 Agreement, and every 180 days thereafter until the 

16 President enters into the Agreement, the President 

17 shall provide a briefing to the appropriate congres18 sional committees on the status of the negotiations, 

19 including a description of elements under negotia20 tion. 

21 (2) MEETINGS AND OTHER CONSULTATIONS.— 

22 (A) IN GENERAL.—In the course of nego23 tiations with respect to the Agreement, the Sec24 retary of the Treasury, in coordination with the 

25 Secretary of State, shall— 


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1 (i) meet, upon request, with the chair2 man or ranking member of any of the ap3 propriate congressional committees regard4 ing negotiating objectives and the status of 

5 negotiations in progress; and 

6 (ii) consult closely and on a timely 

7 basis with, and keep fully apprised of the 

8 negotiations, the appropriate congressional 

9 committees. 

10 (B) ELEMENTS OF CONSULTATIONS.—The 

11 consultations described in subparagraph (A) 

12 shall include consultations with respect to— 

13 (i) the nature of the contemplated 

14 Agreement; 

15 (ii) how and to what extent the con16 templated Agreement is consistent with the 

17 elements set forth in section 313(b); and 

18 (iii) the implementation of the con19 templated Agreement, including— 

20 (I) the general effect of the con21 templated Agreement on existing laws; 

22 (II) proposed changes to any ex23 isting laws to implement the con24 templated Agreement; and 


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1 (III) proposed administrative ac2 tions to implement the contemplated 

3 Agreement. 

4 SEC. 315. APPROVAL AND IMPLEMENTATION OF AGREE5 MENT. 

6 (a) IN GENERAL.—The Agreement may not enter 

7 into force unless— 

8 (1) the President, at least 60 days before the 

9 day on which the President enters into the Agree10 ment, publishes the text of the contemplated Agree11 ment on a publicly available website of the Depart12 ment of the Treasury; and 

13 (2) there is enacted into law, with respect to 

14 the Agreement, approval legislation and imple15 menting legislation pursuant to section 317. 

16 (b) ENTRY INTO FORCE.—The President may pro17 vide for the Agreement to enter into force upon— 

18 (1) enactment of approval legislation and imple19 menting legislation pursuant to section 317; and 

20 (2) confirmation by the Secretary of the Treas21 ury that the relevant authority in Taiwan has ap22 proved and taken appropriate steps required to im23 plement the Agreement. 


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1 SEC. 316. SUBMISSION TO CONGRESS OF AGREEMENT AND 

2 IMPLEMENTATION POLICY. 

3 (a) SUBMISSION OF AGREEMENT.—Not later than 

4 270 days after the President enters into the Agreement, 

5 the President or the President’s designee shall submit to 

6 Congress— 

7 (1) the final text of the Agreement; and 

8 (2) a technical explanation of the Agreement. 

9 (b) SUBMISSION OF IMPLEMENTATION POLICY.—Not 

10 later than 270 days after the President enters into the 

11 Agreement, the Secretary of the Treasury shall submit to 

12 Congress— 

13 (1) a description of those changes to existing 

14 laws that the President considers would be required 

15 in order to ensure that the United States acts in a 

16 manner consistent with the Agreement; and 

17 (2) a statement of anticipated administrative 

18 action proposed to implement the Agreement. 

19 SEC. 317. CONSIDERATION OF APPROVAL LEGISLATION 

20 AND IMPLEMENTING LEGISLATION. 

21 (a) IN GENERAL.—The approval legislation with re22 spect to the Agreement shall include the following: ‘‘Con23 gress approves the Agreement submitted to Congress pur24 suant to section 316 of the United States-Taiwan Tax 

25 Agreement Authorization Act on llll.’’, with the 

26 blank space being filled with the appropriate date. 


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1 (b) APPROVAL LEGISLATION COMMITTEE REFER2 RAL.—The approval legislation shall— 

3 (1) in the Senate, be referred to the Committee 

4 on Foreign Relations; and 

5 (2) in the House of Representaives, be referred 

6 to the Committee on Ways and Means. 

7 (c) IMPLEMENTING LEGISLATION COMMITTEE RE8 FERRAL.—The implementing legislation shall— 

9 (1) in the Senate, be referred to the Committee 

10 on Finance; and 

11 (2) in the House of Representatives, be referred 

12 to the Committee on Ways and Means. 

13 SEC. 318. RELATIONSHIP OF AGREEMENT TO INTERNAL 

14 REVENUE CODE OF 1986. 

15 (a) INTERNAL REVENUE CODE OF 1986 TO CON16 TROL.—No provision of the Agreement or approval legisla17 tion, nor the application of any such provision to any per18 son or circumstance, which is inconsistent with any provi19 sion of the Internal Revenue Code of 1986, shall have ef20 fect. 

21 (b) CONSTRUCTION.—Nothing in this subtitle shall 

22 be construed— 

23 (1) to amend or modify any law of the United 

24 States; or 


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1 (2) to limit any authority conferred under any 

2 law of the United States, 

3 unless specifically provided for in this subtitle. 

4 SEC. 319. AUTHORIZATION OF SUBSEQUENT TAX AGREE5 MENTS RELATIVE TO TAIWAN. 

6 (a) IN GENERAL.—Subsequent to the enactment of 

7 approval legislation and implementing legislation pursuant 

8 to section 317— 

9 (1) the term ‘‘tax agreement’’ in section 313(a) 

10 shall be treated as including any tax agreement rel11 ative to Taiwan which supplements or supersedes 

12 the Agreement to which such approval legislation 

13 and implementing legislation relates, and 

14 (2) the term ‘‘Agreement’’ shall be treated as 

15 including such tax agreement. 

16 (b) REQUIREMENTS, ETC., TO APPLY SEPA17 RATELY.—The provisions of this subtitle (including sec18 tion 314) shall be applied separately with respect to each 

19 tax agreement referred to in subsection (a). 

20 SEC. 320. UNITED STATES TREATMENT OF DOUBLE TAX21 ATION MATTERS WITH RESPECT TO TAIWAN. 

22 (a) FINDINGS.—Congress makes the following find23 ings: 

24 (1) The United States addresses issues with re25 spect to double taxation with foreign countries by 


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1 entering into bilateral income tax conventions 

2 (known as tax treaties) with such countries, subject 

3 to the advice and consent of the Senate to ratifica4 tion pursuant to article II of the Constitution. 

5 (2) The United States has entered into more 

6 than sixty such tax treaties, which facilitate eco7 nomic activity, strengthen bilateral cooperation, and 

8 benefit United States workers, businesses, and other 

9 United States taxpayers. 

10 (3) Due to Taiwan’s unique status, the United 

11 States is unable to enter into an article II tax treaty 

12 with Taiwan, necessitating an agreement to address 

13 issues with respect to double taxation. 

14 (b) STATEMENT OF POLICY.—It is the policy of the 

15 United States to— 

16 (1) provide for additional bilateral tax relief 

17 with respect to Taiwan, beyond that provided for in 

18 section 894A of the Internal Revenue Code of 1986 

19 (as added by the United States-Taiwan Expedited 

20 Double-Tax Relief Act), only after entry into force 

21 of an Agreement, as provided for in section 315, and 

22 only in a manner consistent with such Agreement; 

23 and 

24 (2) continue to provide for bilateral tax relief 

25 with sovereign states to address double taxation and 


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1 other related matters through entering into bilateral 

2 income tax conventions, subject to the Senate’s ad3 vice and consent to ratification pursuant to article II 

4 of the Constitution. 

5 TITLE IV—ASSISTANCE FOR DIS6 ASTER-IMPACTED COMMU7 NITIES 

8 SEC. 401. SHORT TITLE. 

9 This title may be cited as the ‘‘Federal Disaster Tax 

10 Relief Act of 2024’’. 

11 SEC. 402. EXTENSION OF RULES FOR TREATMENT OF CER12 TAIN DISASTER-RELATED PERSONAL CAS13 UALTY LOSSES. 

14 For purposes of applying section 304(b) of the Tax15 payer Certainty and Disaster Tax Relief Act of 2020, sec16 tion 301 of such Act shall be applied by substituting ‘‘the 

17 Federal Disaster Tax Relief Act of 2024’’ for ‘‘this Act’’ 

18 each place it appears. 

19 SEC. 403. EXCLUSION FROM GROSS INCOME FOR COM20 PENSATION FOR LOSSES OR DAMAGES RE21 SULTING FROM CERTAIN WILDFIRES. 

22 (a) IN GENERAL.—For purposes of the Internal Rev23 enue Code of 1986, gross income shall not include any 

24 amount received by an individual as a qualified wildfire 

25 relief payment. 


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1 (b) QUALIFIED WILDFIRE RELIEF PAYMENT.—For 

2 purposes of this section— 

3 (1) IN GENERAL.—The term ‘‘qualified wildfire 

4 relief payment’’ means any amount received by or on 

5 behalf of an individual as compensation for losses, 

6 expenses, or damages (including compensation for 

7 additional living expenses, lost wages (other than 

8 compensation for lost wages paid by the employer 

9 which would have otherwise paid such wages), per10 sonal injury, death, or emotional distress) incurred 

11 as a result of a qualified wildfire disaster, but only 

12 to the extent the losses, expenses, or damages com13 pensated by such payment are not compensated for 

14 by insurance or otherwise. 

15 (2) QUALIFIED WILDFIRE DISASTER.—The 

16 term ‘‘qualified wildfire disaster’’ means any feder17 ally declared disaster (as defined in section 

18 165(i)(5)(A) of the Internal Revenue Code of 1986) 

19 declared, after December 31, 2014, as a result of 

20 any forest or range fire. 

21 (c) DENIAL OF DOUBLE BENEFIT.—Notwith22 standing any other provision of the Internal Revenue Code 

23 of 1986— 

24 (1) no deduction or credit shall be allowed (to 

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1 lief payment is made) for, or by reason of, any ex2 penditure to the extent of the amount excluded 

3 under this section with respect to such expenditure, 

4 and 

5 (2) no increase in the basis or adjusted basis of 

6 any property shall result from any amount excluded 

7 under this subsection with respect to such property. 

8 (d) LIMITATION ON APPLICATION.—This section 

9 shall only apply to qualified wildfire relief payments re10 ceived by the individual during taxable years beginning 

11 after December 31, 2019, and before January 1, 2026. 

12 SEC. 404. EAST PALESTINE DISASTER RELIEF PAYMENTS. 

13 (a) DISASTER RELIEF PAYMENTS TO VICTIMS OF

14 EAST PALESTINE TRAIN DERAILMENT.—East Palestine 

15 train derailment payments shall be treated as qualified 

16 disaster relief payments for purposes of section 139(b) of 

17 the Internal Revenue Code of 1986. 

18 (b) EAST PALESTINE TRAIN DERAILMENT PAY19 MENTS.—For purposes of this section, the term ‘‘East 

20 Palestine train derailment payment’’ means any amount 

21 received by or on behalf of an individual as compensation 

22 for loss, damages, expenses, loss in real property value, 

23 closing costs with respect to real property (including real24 tor commissions), or inconvenience (including access to 


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1 real property) resulting from the East Palestine train de2 railment if such amount was provided by— 

3 (1) a Federal, State, or local government agen4 cy, 

5 (2) Norfolk Southern Railway, or 

6 (3) any subsidiary, insurer, or agent of Norfolk 

7 Southern Railway or any related person. 

8 (c) TRAIN DERAILMENT.—For purposes of this sec9 tion, the term ‘‘East Palestine train derailment’’ means 

10 the derailment of a train in East Palestine, Ohio, on Feb11 ruary 3, 2023. 

12 (d) EFFECTIVE DATE.—This section shall apply to 

13 amounts received on or after February 3, 2023. 

14 TITLE V—MORE AFFORDABLE 

15 HOUSING 

16 SEC. 501. STATE HOUSING CREDIT CEILING INCREASE FOR 

17 LOW-INCOME HOUSING CREDIT. 

18 (a) IN GENERAL.—Section 42(h)(3)(I) is amended— 

19 (1) by striking ‘‘and 2021,’’ and inserting 

20 ‘‘2021, 2023, 2024, and 2025,’’, and 

21 (2) by striking ‘‘2018, 2019, 2020, AND 2021’’ in 

22 the heading and inserting ‘‘CERTAIN CALENDAR

23 YEARS’’. 

24 (b) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply to calendar years after 2022. 


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1 SEC. 502. TAX-EXEMPT BOND FINANCING REQUIREMENT. 

2 (a) IN GENERAL.—Section 42(h)(4) is amended by 

3 striking subparagraph (B) and inserting the following: 

4 ‘‘(B) SPECIAL RULE WHERE MINIMUM

5 PERCENT OF BUILDINGS IS FINANCED WITH

6 TAX-EXEMPT BONDS SUBJECT TO VOLUME

7 CAP.—For purposes of subparagraph (A), para8 graph (1) shall not apply to any portion of the 

9 credit allowable under subsection (a) with re10 spect to a building if— 

11 ‘‘(i) 50 percent or more of the aggre12 gate basis of such building and the land on 

13 which the building is located is financed by 

14 1 or more obligations described in subpara15 graph (A), or 

16 ‘‘(ii)(I) 30 percent or more of the ag17 gregate basis of such building and the land 

18 on which the building is located is financed 

19 by 1 or more qualified obligations, and 

20 ‘‘(II) 1 or more of such qualified obli21 gations— 

22 ‘‘(aa) are part of an issue the 

23 issue date of which is after December 

24 31, 2023, and 

25 ‘‘(bb) provide the financing for 

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1 gate basis of such building and the 

2 land on which the building is located. 

3 ‘‘(C) QUALIFIED OBLIGATION.—For pur4 poses of subparagraph (B)(ii), the term ‘quali5 fied obligation’ means an obligation which is de6 scribed in subparagraph (A) and which is part 

7 of an issue the issue date of which is before 

8 January 1, 2026.’’. 

9 (b) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—The amendment made by 

11 this section shall apply to buildings placed in service 

12 in taxable years beginning after December 31, 2023. 

13 (2) REHABILITATION EXPENDITURES TREATED

14 AS SEPARATE NEW BUILDING.—In the case of any 

15 building with respect to which any expenditures are 

16 treated as a separate new building under section 

17 42(e) of the Internal Revenue Code of 1986, for 

18 purposes of paragraph (1), both the existing building 

19 and the separate new building shall be treated as 

20 having been placed in service on the date such ex21 penditures are treated as placed in service under 

22 section 42(e)(4) of such Code. 


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1 TITLE VI—TAX ADMINISTRATION 

2 AND ELIMINATING FRAUD 

3 SEC. 601. INCREASE IN THRESHOLD FOR REQUIRING IN4 FORMATION REPORTING WITH RESPECT TO 

5 CERTAIN PAYEES. 

6 (a) IN GENERAL.—Sections 6041(a) is amended by 

7 striking ‘‘$600’’ and inserting ‘‘$1,000’’. 

8 (b) INFLATION ADJUSTMENT.—Section 6041 is 

9 amended by adding at the end the following new sub10 section: 

11 ‘‘(h) INFLATION ADJUSTMENT.—In the case of any 

12 calendar year after 2024, the dollar amount in subsection 

13 (a) shall be increased by an amount equal to— 

14 ‘‘(1) such dollar amount, multiplied by 

15 ‘‘(2) the cost-of-living adjustment determined 

16 under section 1(f)(3) for such calendar year, deter17 mined by substituting ‘calendar year 2023’ for ‘cal18 endar year 2016’ in subparagraph (A)(ii) thereof. 

19 If any increase under the preceding sentence is not a mul20 tiple of $100, such increase shall be rounded to the nearest 

21 multiple of $100.’’. 

22 (c) APPLICATION TO REPORTING ON REMUNERATION

23 FOR SERVICES AND DIRECT SALES.—Section 6041A is 

24 amended— 


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1 (1) in subsection (a)(2), by striking ‘‘is $600 or 

2 more’’ and inserting ‘‘equals or exceeds the dollar 

3 amount in effect for such calendar year under sec4 tion 6041(a)’’, and 

5 (2) in subsection (b)(1)(B), by striking ‘‘is 

6 $5,000 or more’’ and inserting ‘‘equals or exceeds 

7 the dollar amount in effect for such calendar year 

8 under section 6041(a)’’. 

9 (d) APPLICATION TO BACKUP WITHHOLDING.—Sec10 tion 3406(b)(6) is amended— 

11 (1) by striking ‘‘$600’’ in subparagraph (A) 

12 and inserting ‘‘the dollar amount in effect for such 

13 calendar year under section 6041(a)’’, and 

14 (2) by striking ‘‘ONLY WHERE AGGREGATE FOR

15 CALENDAR YEAR IS $600 OR MORE’’ in the heading 

16 and inserting ‘‘ONLY IF IN EXCESS OF THRESHOLD’’. 

17 (e) CONFORMING AMENDMENTS.— 

18 (1) The heading of section 6041(a) is amended 

19 by striking ‘‘OF $600 OR MORE’’ and inserting ‘‘EX20 CEEDING THRESHOLD’’. 

21 (2) Section 6041(a) is amended by striking 

22 ‘‘taxable year’’ and inserting ‘‘calendar year’’. 

23 (f) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply with respect to payments made 

25 after December 31, 2023. 


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1 SEC. 602. ENFORCEMENT PROVISIONS WITH RESPECT TO 

2 COVID-RELATED EMPLOYEE RETENTION 

3 CREDITS. 

4 (a) INCREASE IN ASSESSABLE PENALTY ON COVID– 

5 ERTC PROMOTERS FOR AIDING AND ABETTING UNDER6 STATEMENTS OF TAX LIABILITY.— 

7 (1) IN GENERAL.—If any COVID–ERTC pro8 moter is subject to penalty under section 6701(a) of 

9 the Internal Revenue Code of 1986 with respect to 

10 any COVID–ERTC document, notwithstanding 

11 paragraphs (1) and (2) of section 6701(b) of such 

12 Code, the amount of the penalty imposed under such 

13 section 6701(a) shall be the greater of— 

14 (A) $200,000 ($10,000, in the case of a 

15 natural person), or 

16 (B) 75 percent of the gross income derived 

17 (or to be derived) by such promoter with re18 spect to the aid, assistance, or advice referred 

19 to in section 6701(a)(1) of such Code with re20 spect to such document. 

21 (2) NO INFERENCE.—Paragraph (1) shall not 

22 be construed to create any inference with respect to 

23 the proper application of the knowledge requirement 

24 of section 6701(a)(3) of the Internal Revenue Code 

25 of 1986. 


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1 (b) FAILURE TO COMPLY WITH DUE DILIGENCE RE2 QUIREMENTS TREATED AS KNOWLEDGE FOR PURPOSES

3 OF ASSESSABLE PENALTY FOR AIDING AND ABETTING

4 UNDERSTATEMENT OF TAX LIABILITY.—In the case of 

5 any COVID–ERTC promoter, the knowledge requirement 

6 of section 6701(a)(3) of the Internal Revenue Code of 

7 1986 shall be treated as satisfied with respect to any 

8 COVID–ERTC document with respect to which such pro9 moter provided aid, assistance, or advice, if such promoter 

10 fails to comply with the due diligence requirements re11 ferred to in subsection (c)(1). 

12 (c) ASSESSABLE PENALTY FOR FAILURE TO COMPLY

13 WITH DUE DILIGENCE REQUIREMENTS.— 

14 (1) IN GENERAL.—Any COVID–ERTC pro15 moter which provides aid, assistance, or advice with 

16 respect to any COVID–ERTC document and which 

17 fails to comply with due diligence requirements im18 posed by the Secretary with respect to determining 

19 eligibility for, or the amount of, any COVID-related 

20 employee retention tax credit, shall pay a penalty of 

21 $1,000 for each such failure. 

22 (2) DUE DILIGENCE REQUIREMENTS.—Except 

23 as otherwise provided by the Secretary, the due dili24 gence requirements referred to in paragraph (1) 


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1 shall be similar to the due diligence requirements 

2 imposed under section 6695(g). 

3 (3) RESTRICTION TO DOCUMENTS USED IN

4 CONNECTION WITH RETURNS OR CLAIMS FOR RE5 FUND.—Paragraph (1) shall not apply with respect 

6 to any COVID–ERTC document unless such docu7 ment constitutes, or relates to, a return or claim for 

8 refund. 

9 (4) TREATMENT AS ASSESSABLE PENALTY, 

10 ETC.—For purposes of the Internal Revenue Code of 

11 1986, the penalty imposed under paragraph (1) shall 

12 be treated in the same manner as a penalty imposed 

13 under section 6695(g). 

14 (5) SECRETARY.—For purposes of this sub15 section, the term ‘‘Secretary’’ means the Secretary 

16 of the Treasury or the Secretary’s delegate. 

17 (d) ASSESSABLE PENALTIES FOR FAILURE TO DIS18 CLOSE INFORMATION, MAINTAIN CLIENT LISTS, ETC.— 

19 For purposes of sections 6111, 6112, 6707 and 6708 of 

20 the Internal Revenue Code of 1986— 

21 (1) any COVID-related employee retention tax 

22 credit (whether or not the taxpayer claims such 

23 COVID-related employee retention tax credit) shall 

24 be treated as a listed transaction (and as a report25 able transaction) with respect to any COVID–ERTC 


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1 promoter if such promoter provides any aid, assist2 ance, or advice with respect to any COVID–ERTC 

3 document relating to such COVID-related employee 

4 retention tax credit, and 

5 (2) such COVID–ERTC promoter shall be 

6 treated as a material advisor with respect to such 

7 transaction. 

8 (e) COVID–ERTC PROMOTER.—For purposes of 

9 this section— 

10 (1) IN GENERAL.—The term ‘‘COVID–ERTC 

11 promoter’’ means, with respect to any COVID– 

12 ERTC document, any person which provides aid, as13 sistance, or advice with respect to such document 

14 if— 

15 (A) such person charges or receives a fee 

16 for such aid, assistance, or advice which is 

17 based on the amount of the refund or credit 

18 with respect to such document and, with respect 

19 to such person’s taxable year in which such per20 son provided such assistance or the preceding 

21 taxable year, the aggregate gross receipts of 

22 such person for aid, assistance, and advice with 

23 respect to all COVID-ERTC documents exceeds 

24 20 percent of the gross receipts of such person 

25 for such taxable year, or 


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1 (B) with respect to such person’s taxable 

2 year in which such person provided such assist3 ance or the preceding taxable year— 

4 (i) the aggregate gross receipts of 

5 such person for aid, assistance, and advice 

6 with respect to all COVID–ERTC docu7 ments exceeds 50 percent of the gross re8 ceipts of such person for such taxable year, 

9 or 

10 (ii) both— 

11 (I) such aggregate gross receipts 

12 exceeds 20 percent of the gross re13 ceipts of such person for such taxable 

14 year, and 

15 (II) the aggregate gross receipts 

16 of such person for aid, assistance, and 

17 advice with respect to all COVID– 

18 ERTC documents (determined after 

19 application of paragraph (3)) exceeds 

20 $500,000. 

21 (2) EXCEPTION FOR CERTIFIED PROFESSIONAL

22 EMPLOYER ORGANIZATIONS.—The term ‘‘COVID– 

23 ERTC promoter’’ shall not include a certified profes24 sional employer organization (as defined in section 

25 7705). 


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1 (3) AGGREGATION RULE.—For purposes of 

2 paragraph (1)(B)(ii)(II), all persons treated as a 

3 single employer under subsection (a) or (b) of sec4 tion 52 of the Internal Revenue Code of 1986, or 

5 subsection (m) or (o) of section 414 of such Code, 

6 shall be treated as 1 person. 

7 (4) SHORT TAXABLE YEARS.—In the case of 

8 any taxable year of less than 12 months, paragraph 

9 (1) shall be applied with respect to the calendar year 

10 in which such taxable year begins (in addition to ap11 plying to such taxable year). 

12 (f) COVID–ERTC DOCUMENT.—For purposes of 

13 this section, the term ‘‘COVID–ERTC document’’ means 

14 any return, affidavit, claim, or other document related to 

15 any COVID-related employee retention tax credit, includ16 ing any document related to eligibility for, or the calcula17 tion or determination of any amount directly related to 

18 any COVID-related employee retention tax credit. 

19 (g) COVID-RELATED EMPLOYEE RETENTION TAX

20 CREDIT.—For purposes of this section, the term 

21 ‘‘COVID-related employee retention tax credit’’ means— 

22 (1) any credit, or advance payment, under sec23 tion 3134 of the Internal Revenue Code of 1986, 

24 and 


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1 (2) any credit, or advance payment, under sec2 tion 2301 of the CARES Act. 

3 (h) LIMITATION ON CREDIT AND REFUND OF

4 COVID-RELATED EMPLOYEE RETENTION TAX CRED5 ITS.—Notwithstanding section 6511 of the Internal Rev6 enue Code of 1986 or any other provision of law, no credit 

7 or refund of any COVID-related employee retention tax 

8 credit shall be allowed or made after January 31, 2024, 

9 unless a claim for such credit or refund is filed by the 

10 taxpayer on or before such date. 

11 (i) AMENDMENTS TO EXTEND LIMITATION ON AS12 SESSMENT.— 

13 (1) IN GENERAL.—Section 3134(l) of the Inter14 nal Revenue Code of 1986 is amended to read as fol15 lows: 

16 ‘‘(l) EXTENSION OF LIMITATION ON ASSESSMENT.— 

17 ‘‘(1) IN GENERAL.—Notwithstanding section 

18 6501, the limitation on the time period for the as19 sessment of any amount attributable to a credit 

20 claimed under this section shall not expire before the 

21 date that is 6 years after the latest of— 

22 ‘‘(A) the date on which the original return 

23 which includes the calendar quarter with re24 spect to which such credit is determined is filed, 


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1 ‘‘(B) the date on which such return is 

2 treated as filed under section 6501(b)(2), or 

3 ‘‘(C) the date on which the claim for credit 

4 or refund with respect to such credit is made. 

5 ‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC6 COUNT IN DETERMINING IMPROPERLY CLAIMED

7 CREDIT.— 

8 ‘‘(A) IN GENERAL.—Notwithstanding sec9 tion 6511, in the case of an assessment attrib10 utable to a credit claimed under this section, 

11 the limitation on the time period for credit or 

12 refund of any amount attributable to a deduc13 tion for improperly claimed ERTC wages shall 

14 not expire before the time period for such as15 sessment expires under paragraph (1). 

16 ‘‘(B) IMPROPERLY CLAIMED ERTC

17 WAGES.—For purposes of this paragraph, the 

18 term ‘improperly claimed ERTC wages’ means, 

19 with respect to an assessment attributable to a 

20 credit claimed under this section, the wages 

21 with respect to which a deduction would not 

22 have been allowed if the portion of the credit to 

23 which such assessment relates had been prop24 erly claimed.’’. 


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1 (2) APPLICATION TO CARES ACT CREDIT.—Sec2 tion 2301 of the CARES Act is amended by adding 

3 at the end the following new subsection: 

4 ‘‘(o) EXTENSION OF LIMITATION ON ASSESSMENT.— 

5 ‘‘(1) IN GENERAL.—Notwithstanding section 

6 6501 of the Internal Revenue Code of 1986, the lim7 itation on the time period for the assessment of any 

8 amount attributable to a credit claimed under this 

9 section shall not expire before the date that is 6 

10 years after the latest of— 

11 ‘‘(A) the date on which the original return 

12 which includes the calendar quarter with re13 spect to which such credit is determined is filed, 

14 ‘‘(B) the date on which such return is 

15 treated as filed under section 6501(b)(2) of 

16 such Code, or 

17 ‘‘(C) the date on which the claim for credit 

18 or refund with respect to such credit is made. 

19 ‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC20 COUNT IN DETERMINING IMPROPERLY CLAIMED

21 CREDIT.— 

22 ‘‘(A) IN GENERAL.—Notwithstanding sec23 tion 6511 of such Code, in the case of an as24 sessment attributable to a credit claimed under 

25 this section, the limitation on the time period 


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1 for credit or refund of any amount attributable 

2 to a deduction for improperly claimed ERTC 

3 wages shall not expire before the time period 

4 for such assessment expires under paragraph 

5 (1). 

6 ‘‘(B) IMPROPERLY CLAIMED ERTC

7 WAGES.—For purposes of this paragraph, the 

8 term ‘improperly claimed ERTC wages’ means, 

9 with respect to an assessment attributable to a 

10 credit claimed under this section, the wages 

11 with respect to which a deduction would not 

12 have been allowed if the portion of the credit to 

13 which such assessment relates had been prop14 erly claimed.’’. 

15 (j) EFFECTIVE DATES.— 

16 (1) IN GENERAL.—Except as otherwise pro17 vided in this subsection, the provisions of this sec18 tion shall apply to aid, assistance, and advice pro19 vided after March 12, 2020. 

20 (2) DUE DILIGENCE REQUIREMENTS.—Sub21 sections (b) and (c) shall apply to aid, assistance, 

22 and advice provided after the date of the enactment 

23 of this Act. 

24 (3) LIMITATION ON CREDIT AND REFUND OF

25 COVID-RELATED EMPLOYEE RETENTION TAX CREDVerDate Sep 11 2014 22:54 Mar 22, 2024 Jkt 049200 PO 00000 Frm 00081 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.PCS H7024

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1 ITS.—Subsection (h) shall apply to credits and re2 funds allowed or made after January 31, 2024. 

3 (4) AMENDMENTS TO EXTEND LIMITATION ON

4 ASSESSMENT.—The amendments made by subsection 

5 (i) shall apply to assessments made after the date of 

6 the enactment of this Act. 

7 (k) TRANSITION RULE WITH RESPECT TO REQUIRE8 MENTS TO DISCLOSE INFORMATION, MAINTAIN CLIENT

9 LISTS, ETC.—Any return under section 6111 of the Inter10 nal Revenue Code of 1986, or list under section 6112 of 

11 such Code, required by reason of subsection (d) of this 

12 section to be filed or maintained, respectively, with respect 

13 to any aid, assistance, or advice provided by a COVID– 

14 ERTC promoter with respect to a COVID–ERTC docu15 ment before the date of the enactment of this Act, shall 

16 not be required to be so filed or maintained (with respect 

17 to such aid, assistance or advice) before the date which 

18 is 90 days after such date. 

19 (l) PROVISIONS NOT TO BE CONSTRUED TO CREATE

20 NEGATIVE INFERENCES.— 

21 (1) NO INFERENCE WITH RESPECT TO APPLICA22 TION OF KNOWLEDGE REQUIREMENT TO PRE-EN23 ACTMENT CONDUCT OF COVID-ERTC PROMOTERS, 

24 ETC.—Subsection (b) shall not be construed to cre25 ate any inference with respect to the proper applicaVerDate Sep 11 2014 22:54 Mar 22, 2024 Jkt 049200 PO 00000 Frm 00082 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.PCS H7024

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1 tion of section 6701(a)(3) of the Internal Revenue 

2 Code of 1986 with respect to any aid, assistance, or 

3 advice provided by any COVID-ERTC promoter on 

4 or before the date of the enactment of this Act (or 

5 with respect to any other aid, assistance, or advice 

6 to which such subsection does not apply). 

7 (2) REQUIREMENTS TO DISCLOSE INFORMA8 TION, MAINTAIN CLIENT LISTS, ETC.—Subsections 

9 (d) and (k) shall not be construed to create any in10 ference with respect to whether any COVID-related 

11 employee retention tax credit is (without regard to 

12 subsection (d)) a listed transaction (or reportable 

13 transaction) with respect to any COVID–ERTC pro14 moter; and, for purposes of subsection (j), a return 

15 or list shall not be treated as required (with respect 

16 to such aid, assistance, or advice) by reason of sub17 section (d) if such return or list would be so re18 quired without regard to subsection (d). 

19 (m) REGULATIONS.—The Secretary (as defined in 

20 subsection (c)(5)) shall issue such regulations or other 

21 guidance as may be necessary or appropriate to carry out 


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1 the purposes of this section (and the amendments made 

2 by this section). 

Passed the House of Representatives January 31, 

2024. 

Attest: KEVIN F. MCCUMBER, 

Clerk. 


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Calendar No. 349 

118TH CONGRESS 

2D SESSION H. R. 7024 

AN ACT 

To make improvements to the child tax credit, to 

tax credit, and for other purposes. make improvements to the low-income housing relief with respect to certain Federal disasters, to sources within the United States, to provide tax of certain residents of Taiwan with income from growth, to provide special rules for the taxation provide tax incentives to promote economic 

MARCH 21, 2024 

Read the second time and placed on the calendar 


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