IB 

Union Calendar No. 288 

118TH CONGRESS 

2D SESSION H. R. 7024 

[Report No. 118–353, Part I] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 17, 2024 

Mr. SMITH of Missouri introduced the following bill; which was referred to the 

Committee on Ways and Means, and in addition to the Committee on 

Rules, for a period to be subsequently determined by the Speaker, in each 

case for consideration of such provisions as fall within the jurisdiction of 

the committee concerned 

JANUARY 23, 2024 

Reported from the Committee on Ways and Means with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

JANUARY 23, 2024 

Committee on Rules discharged; committed to the Committee of the Whole 

House on the State of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on January 17, 2024] 


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A BILL 

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. 


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

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

4 (a) SHORT TITLE.—This Act may be cited as the ‘‘Tax 

5 Relief for American Families and Workers Act of 2024’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as otherwise 

7 expressly provided, whenever in this Act an amendment or 

8 repeal is expressed in terms of an amendment to, or repeal 

9 of, a section or other provision, the reference shall be consid10 ered to be made to a section or other provision of the Inter11 nal Revenue Code of 1986. 

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

13 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. 


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

Sec. 314. Consultations with Congress. 

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 under 

7 clause (i) thereof, and 

8 ‘‘(II) the excess determined under 

9 clause (ii) thereof, 

10 by the number of qualifying children of the 

11 taxpayer.’’. 

12 (b) CONFORMING AMENDMENT.—The heading of para13 graph (5) of section 24(h) is amended by striking ‘‘MAX14 IMUM AMOUNT OF’’ and inserting ‘‘SPECIAL RULES FOR’’. 

15 (c) EFFECTIVE DATE.—The amendments made by this 

16 section shall apply to taxable years beginning after Decem17 ber 31, 2022. 

18 SEC. 102. INCREASE IN REFUNDABLE PORTION. 

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

20 amended by redesignating subparagraph (B) as subpara21 graph (C) and by inserting after subparagraph (A) the fol22 lowing new subparagraph: 

23 ‘‘(B) AMOUNTS FOR 2023, 2024, AND 2025.— 

24 In the case of a taxable year beginning after 


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1 2022, subparagraph (A) shall be applied by sub2 stituting 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) of 

10 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 this 

13 section shall apply to taxable years beginning after Decem14 ber 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 the 

24 case of a taxable year beginning after 2023, the 

25 $2,000 amounts in subparagraph (A) and paraVerDate Sep 11 2014 00:08 Jan 24, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H7024.RH H7024

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1 graph (5)(B)(iii) shall each be increased by an 

2 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 this 

13 section shall apply to taxable years beginning after Decem14 ber 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 tax4 able year is less than the earned income of 

5 the taxpayer for the preceding taxable year, 

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

7 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 of 

16 the taxpayer for the preceding taxable year 

17 shall be the sum of the earned income of 

18 each spouse for such preceding taxable 

19 year.’’. 

20 (b) ERRORS TREATED AS MATHEMATICAL ERRORS.— 

21 Paragraph (2) of section 6213(g) of the Internal Revenue 

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

23 subparagraph (U), by striking the period at the end of sub24 paragraph (V) and inserting ‘‘, and’’, and by inserting after 

25 subparagraph (V) the following new subparagraph: 


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

2 application of section 24(h)(6)(B) for any tax3 able year, an entry on a return of earned income 

4 pursuant to such section which is inconsistent 

5 with the amount of such earned income deter6 mined by the Secretary for the preceding taxable 

7 year.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by this 

9 section shall apply to taxable years beginning after Decem10 ber 31, 2023. 

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

12 RETURNS. 

13 In the case of an individual who claims, on the tax14 payer’s return of tax for the first taxable year beginning 

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

16 Internal Revenue Code of 1986 which is determined without 

17 regard to the amendments made by sections 101 and 102 

18 of this Act, the Secretary of the Treasury (or the Secretary’s 

19 delegate) shall, to the maximum extent practicable— 

20 (1) redetermine the amount of such credit (after 

21 taking into account such amendments) on the basis of 

22 the information provided by the taxpayer on such re23 turn, and 


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1 (2) to the extent that such redetermination re2 sults in an overpayment of tax, credit or refund such 

3 overpayment as expeditiously as possible. 

4 TITLE II—AMERICAN 

5 INNOVATION AND GROWTH 

6 SEC. 201. DEDUCTION FOR DOMESTIC RESEARCH AND EX7 PERIMENTAL EXPENDITURES. 

8 (a) DELAY OF AMORTIZATION OF DOMESTIC RE9 SEARCH AND EXPERIMENTAL EXPENDITURES.—Section 

10 174 is amended by adding at the end the following new 

11 subsection: 

12 ‘‘(e) SUSPENSION OF APPLICATION OF SECTION TO DO13 MESTIC RESEARCH AND EXPERIMENTAL EXPENDITURES.— 

14 In the case of any domestic research or experimental ex15 penditures (as defined in section 174A(b)), this section— 

16 ‘‘(1) shall apply to such expenditures paid or in17 curred in taxable years beginning after December 31, 

18 2025, and 

19 ‘‘(2) shall not apply to such expenditures paid or 

20 incurred in taxable years beginning on or before such 

21 date.’’. 

22 (b) REINSTATEMENT OF EXPENSING FOR DOMESTIC

23 RESEARCH AND EXPERIMENTAL EXPENDITURES.—Part VI 

24 of subchapter B of chapter 1 is amended by inserting after 

25 section 174 the following new section: 


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

2 AND EXPERIMENTAL EXPENDITURES. 

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

4 section 263, there shall be allowed as a deduction any do5 mestic research or experimental expenditures which are 

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

7 ‘‘(b) DOMESTIC RESEARCH OR EXPERIMENTAL EX8 PENDITURES.—For purposes of this section, the term ‘do9 mestic research or experimental expenditures’ means re10 search or experimental expenditures paid or incurred by the 

11 taxpayer in connection with the taxpayer’s trade or busi12 ness other than such expenditures which are attributable to 

13 foreign research (within the meaning of section 

14 41(d)(4)(F)). 

15 ‘‘(c) AMORTIZATION OF CERTAIN DOMESTIC RE16 SEARCH AND EXPERIMENTAL EXPENDITURES.— 

17 ‘‘(1) IN GENERAL.—At the election of the tax18 payer, made in accordance with regulations or other 

19 guidance provided by the Secretary, in the case of do20 mestic research or experimental expenditures which 

21 would (but for subsection (a)) be chargeable to capital 

22 account but not chargeable to property of a character 

23 which is subject to the allowance under section 167 

24 (relating to allowance for depreciation, etc.) or section 

25 611 (relating to allowance for depletion), subsection 

26 (a) shall not apply and the taxpayer shall— 


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1 ‘‘(A) charge such expenditures to capital ac2 count, and 

3 ‘‘(B) be allowed an amortization deduction 

4 of such expenditures ratably over such period of 

5 not less than 60 months as may be selected by 

6 the taxpayer (beginning with the month in 

7 which the taxpayer first realizes benefits from 

8 such expenditures). 

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

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

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

12 time prescribed by law for filing the return for such 

13 taxable year (including extensions thereof). The meth14 od so elected, and the period selected by the taxpayer, 

15 shall be adhered to in computing taxable income for 

16 the taxable year for which the election is made and 

17 for all subsequent taxable years unless, with the ap18 proval of the Secretary, a change to a different meth19 od (or to a different period) is authorized with respect 

20 to part or all of such expenditures. The election shall 

21 not apply to any expenditure paid or incurred during 

22 any taxable year before the taxable year for which the 

23 taxpayer makes the election. 

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

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


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1 manner as the Secretary may provide) the application of 

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

3 domestic research or experimental expenditures shall be 

4 chargeable to capital account. Such election shall not apply 

5 to any expenditure paid or incurred during any taxable 

6 year before the taxable year for which the taxpayer makes 

7 the election and may be made with respect to part of the 

8 expenditures paid or incurred during any taxable year only 

9 with the approval of the Secretary. 

10 ‘‘(e) SPECIAL RULES.— 

11 ‘‘(1) LAND AND OTHER PROPERTY.—This section 

12 shall not apply to any expenditure for the acquisition 

13 or improvement of land, or for the acquisition or im14 provement of property to be used in connection with 

15 the research or experimentation and of a character 

16 which is subject to the allowance under section 167 

17 (relating to allowance for depreciation, etc.) or section 

18 611 (relating to allowance for depletion); but for pur19 poses of this section allowances under section 167, 

20 and allowances under section 611, shall be considered 

21 as expenditures. 

22 ‘‘(2) EXPLORATION EXPENDITURES.—This sec23 tion shall not apply to any expenditure paid or in24 curred for the purpose of ascertaining the existence, 


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

2 other mineral (including oil and gas). 

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

4 of this section, any amount paid or incurred in con5 nection with the development of any software shall be 

6 treated as a research or experimental expenditure. 

7 ‘‘(f) TERMINATION.— 

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

9 to amounts paid or incurred in taxable years begin10 ning after December 31, 2025. 

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

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

13 after December 31, 2025, paragraph (1) (and the cor14 responding application of section 174) shall be treated 

15 as a change in method of accounting for purposes of 

16 section 481 and— 

17 ‘‘(A) such change shall be treated as initi18 ated by the taxpayer, 

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

20 with the consent of the Secretary, and 

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

22 a cut-off basis for any domestic research or ex23 perimental expenditures paid or incurred in tax24 able years beginning after December 31, 2025, 


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1 and no adjustment under section 481(a) shall be 

2 made.’’. 

3 (c) COORDINATION WITH CERTAIN OTHER PROVI4 SIONS.— 

5 (1) RESEARCH CREDIT.— 

6 (A) Section 41(d)(1)(A) is amended by in7 serting ‘‘or domestic research or experimental ex8 penditures under section 174A’’ after ‘‘section 

9 174’’. 

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

11 as follows: 

12 ‘‘(1) IN GENERAL.—The domestic research or ex13 perimental expenditures otherwise taken into account 

14 under section 174 or 174A (as the case may be) shall 

15 be reduced by the amount of the credit allowed under 

16 section 41(a).’’. 

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

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

19 and inserting ‘‘174A(a)’’. 

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

21 59(e)(2)(B) is amended by striking ‘‘section 174(a) 

22 (relating to research and experimental expenditures)’’ 

23 and inserting ‘‘section 174A(a) (relating to temporary 

24 rules for domestic research and experimental expendi25 tures)’’. 


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1 (4) QUALIFIED SMALL ISSUE BONDS.—Section 

2 144(a)(4)(C)(iv) is amended by striking ‘‘174(a)’’ and 

3 inserting ‘‘174A(a)’’. 

4 (5) START-UP EXPENDITURES.—Section 

5 195(c)(1) is amended by striking ‘‘or 174’’ in the last 

6 sentence and inserting ‘‘174, or 174A’’. 

7 (6) CAPITAL EXPENDITURES.— 

8 (A) Section 263(a)(1)(B) is amended by in9 serting ‘‘ or 174A’’ after ‘‘174’’. 

10 (B) Section 263A(c)(2) is amended by in11 serting ‘‘or 174A’’ after ‘‘174’’. 

12 (7) ACTIVE BUSINESS COMPUTER SOFTWARE

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

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

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

16 amended in the last sentence— 

17 (A) by striking ‘‘treated as deferred expenses 

18 under subsection (b) of section 174’’ and insert19 ing ‘‘allowed as an amortization deduction 

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

21 (B) by striking ‘‘such subsection’’ and in22 serting ‘‘such section (as the case may be)’’. 

23 (9) BASIS ADJUSTMENT.—Section 1016(a)(14) is 

24 amended by striking ‘‘deductions as deferred expenses 

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1 perimental expenditures)’’ and inserting ‘‘deductions 

2 under section 174 or 174A’’. 

3 (10) SMALL BUSINESS STOCK.—Section 

4 1202(e)(2)(B) is amended by striking ‘‘research and 

5 experimental expenditures under section 174’’ and in6 serting ‘‘specified research or experimental expendi7 tures under section 174 or domestic research or exper8 imental expenditures under section 174A’’. 

9 (d) CONFORMING AMENDMENTS.— 

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

11 amended by striking subsection (b) (relating to 

12 change in method of accounting). 

13 (2) The table of sections for part VI of sub14 chapter B of chapter 1 is amended by inserting after 

15 the item relating to section 174 the following new 

16 item: 

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

17 (e) EFFECTIVE DATE.— 

18 (1) IN GENERAL.—Except as otherwise provided 

19 in this subsection, the amendments made by this sec20 tion shall apply to amounts paid or incurred in tax21 able years beginning after December 31, 2021. 

22 (2) COORDINATION WITH RESEARCH CREDIT.— 

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


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1 apply to taxable years beginning after December 31, 

2 2022. 

3 (3) REPEAL OF SUPERCEDED CHANGE IN METH4 OD OF ACCOUNTING RULES.—The amendment made 

5 by subsection (d)(1) shall take effect as if included in 

6 Public Law 115–97. 

7 (4) NO INFERENCE WITH RESPECT TO COORDINA8 TION WITH RESEARCH CREDIT FOR PRIOR PERIODS.— 

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

10 not be construed to create any inference with respect 

11 to the proper application of section 280C(c) of the In12 ternal Revenue Code of 1986 with respect to taxable 

13 years beginning before January 1, 2023. 

14 (f) TRANSITION RULES.— 

15 (1) IN GENERAL.—Except as otherwise provided 

16 by the Secretary, an election made under subsection 

17 (c) or (d) of section 174A of the Internal Revenue 

18 Code of 1986 (as added by this section) for the tax19 payer’s first taxable year beginning after December 

20 31, 2021, shall not fail to be treated as timely made 

21 (or as made on the return) if made during the 1-year 

22 period beginning on the date of the enactment of this 

23 Act on an amended return for the taxpayer’s first 

24 taxable year beginning after December 31, 2021, or in 

25 such other manner as the Secretary may provide. 


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1 (2) ELECTION REGARDING TREATMENT AS

2 CHANGE IN METHOD OF ACCOUNTING.—In the case of 

3 any taxpayer which (as of the date of the enactment 

4 of this Act) had adopted a method of accounting pro5 vided by section 174 of the Internal Revenue Code of 

6 1986 (as in effect prior to the amendments made by 

7 this section) for the taxpayer’s first taxable year be8 ginning after December 31, 2021, and elects the ap9 plication of this paragraph— 

10 (A) the amendments made by this section 

11 shall be treated as a change in method of ac12 counting for purposes of section 481 of such 

13 Code, 

14 (B) such change shall be treated as initiated 

15 by the taxpayer for the taxpayer’s immediately 

16 succeeding taxable year, 

17 (C) such change shall be treated as made 

18 with the consent of the Secretary, 

19 (D) such change shall be applied on a modi20 fied cut-off basis, taking into account for pur21 poses of section 481(a) of such Code only the do22 mestic research or experimental expenditures (as 

23 defined in section 174A(b) of such Code (as 

24 added by this section) and determined by apply25 ing the rules of section 174A(e) of such Code) 


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1 paid or incurred in the taxpayer’s first taxable 

2 year beginning after December 31, 2021, and not 

3 allowed as a deduction in such taxable year, and 

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

5 the application of this subparagraph, the amount 

6 of such change (as determined under subpara7 graph (D)) shall be taken into account ratably 

8 over the 2-taxable-year period beginning with the 

9 taxable year referred to in subparagraph (B). 

10 (3) ELECTION REGARDING 10-YEAR WRITEOFF.— 

11 (A) IN GENERAL.—Except as otherwise pro12 vided by the Secretary, an eligible taxpayer 

13 which files, during the 1-year period beginning 

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

15 amended income tax return for the taxable year 

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

17 application of section 59(e) of the Internal Rev18 enue Code of 1986 with respect to qualified ex19 penditures described in section 59(e)(2)(B) of 

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

21 with respect to such taxable year. Such election 

22 shall be filed with such amended income tax re23 turn and shall be effective only to the extent that 

24 such election would have been effective if filed 

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1 able year (determined after taking into account 

2 the amendment made by subsection (c)(3)). 

3 (B) ELIGIBLE TAXPAYER.—For purposes of 

4 subparagraph (A), the term ‘‘eligible taxpayer’’ 

5 means any taxpayer which— 

6 (i) does not elect the application of 

7 paragraph (2), and 

8 (ii) filed an income tax return for such 

9 taxpayer’s first taxable year beginning after 

10 December 31, 2021, before the earlier of— 

11 (I) the due date for such return, 

12 and 

13 (II) the date of the enactment of 

14 this Act. 

15 (4) ELECTION REGARDING COORDINATION WITH

16 RESEARCH CREDIT.—Except as otherwise provided by 

17 the Secretary, an eligible taxpayer (as defined in 

18 paragraph (3)(B) without regard to clause (i) thereof) 

19 which files, during the 1-year period beginning on the 

20 date of the enactment of this Act, an amended income 

21 tax return for the taxpayer’s first taxable year begin22 ning after December 31, 2021, may, notwithstanding 

23 subparagraph (C) of section 280C(c)(2) of the Inter24 nal Revenue Code of 1986 make, or revoke, on such 


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1 amended return the election under such section for 

2 such taxable year. 

3 SEC. 202. EXTENSION OF ALLOWANCE FOR DEPRECIATION, 

4 AMORTIZATION, OR DEPLETION IN DETER5 MINING THE LIMITATION ON BUSINESS IN6 TEREST. 

7 (a) IN GENERAL.—Section 163(j)(8)(A)(v) is amended 

8 by striking ‘‘January 1, 2022’’ and inserting ‘‘January 1, 

9 2026’’. 

10 (b) EFFECTIVE DATE.— 

11 (1) IN GENERAL.—Except as otherwise provided 

12 in this subsection, the amendment made by this sec13 tion shall apply to taxable years beginning after De14 cember 31, 2023. 

15 (2) ELECTION TO APPLY EXTENSION RETRO16 ACTIVELY.—In the case of a taxpayer which elects (at 

17 such time and in such manner as the Secretary may 

18 provide) the application of this paragraph, para19 graph (1) shall be applied by substituting ‘‘December 

20 31, 2021’’ for ‘‘December 31, 2023’’. 

21 SEC. 203. EXTENSION OF 100 PERCENT BONUS DEPRECIA22 TION. 

23 (a) IN GENERAL.—Section 168(k)(6)(A) is amended— 

24 (1) in clause (i)— 


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

2 ‘‘2026’’, and 

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

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

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

6 (b) PROPERTY WITH LONGER PRODUCTION PERI7 ODS.—Section 168(k)(6)(B) is amended— 

8 (1) in clause (i)— 

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

10 ‘‘2027’’, and 

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

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

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

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

15 168(k)(6)(C) is amended— 

16 (1) in clause (i)— 

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

18 ‘‘2026’’, and 

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

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

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

22 (d) EFFECTIVE DATES.— 

23 (1) IN GENERAL.—Except as otherwise provided 

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1 tion shall apply to property placed in service after 

2 December 31, 2022. 

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

4 amendments made by subsection (c) shall apply to 

5 specified plants planted or grafted after December 31, 

6 2022. 

7 SEC. 204. INCREASE IN LIMITATIONS ON EXPENSING OF DE8 PRECIABLE BUSINESS ASSETS. 

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

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

11 and inserting ‘‘$1,290,000’’, and 

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

13 and inserting ‘‘$3,220,000’’. 

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

15 amended— 

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

17 (2018 in the case of the dollar amount in paragraph 

18 (5)(A))’’, and 

19 (2) by striking ‘‘ ‘calendar year 2017’’ and in20 serting ‘‘ ‘calendar year 2024’ (‘calendar year 2017’ 

21 in the case of the dollar amount in paragraph 

22 (5)(A))’’. 

23 (c) EFFECTIVE DATE.—The amendments made by this 

24 section shall apply to property placed in service in taxable 

25 years beginning after December 31, 2023. 


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1 TITLE III—INCREASING GLOBAL 

2 COMPETITIVENESS 

3 Subtitle A—United States-Taiwan 

4 Expedited Double-Tax Relief Act 

5 SEC. 301. SHORT TITLE. 

6 This subtitle may be cited as the ‘‘United States-Tai7 wan Expedited Double-Tax Relief Act’’. 

8 SEC. 302. SPECIAL RULES FOR TAXATION OF CERTAIN RESI9 DENTS OF TAIWAN. 

10 (a) IN GENERAL.—Subpart D of part II of subchapter 

11 N of chapter 1 is amended by inserting after section 894 

12 the following new section: 

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

14 TAIWAN. 

15 ‘‘(a) CERTAIN INCOME FROM UNITED STATES

16 SOURCES.— 

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

18 ETC.— 

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

20 (other than original issue discount), dividends, 

21 royalties, amounts described in section 

22 871(a)(1)(C), and gains described in section 

23 871(a)(1)(D) received by or paid to a qualified 

24 resident of Taiwan— 


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

2 1441(c)(5), and 1442(a) shall each be ap3 plied by substituting ‘the applicable per4 centage (as defined in section 

5 894A(a)(1)(C))’ for ‘30 percent’ each place 

6 it appears, and 

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

8 1441(c)(1) shall each be applied by sub9 stituting ‘a United States permanent estab10 lishment of a qualified resident of Taiwan’ 

11 for ‘a trade or business within the United 

12 States’ each place it appears. 

13 ‘‘(B) EXCEPTIONS.— 

14 ‘‘(i) IN GENERAL.—Subparagraph (A) 

15 shall not apply to— 

16 ‘‘(I) any dividend received from 

17 or paid by a real estate investment 

18 trust which is not a qualified REIT 

19 dividend, 

20 ‘‘(II) any amount subject to sec21 tion 897, 

22 ‘‘(III) any amount received from 

23 or paid by an expatriated entity (as 

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1 eign related person (as defined in sec2 tion 7874(d)(3)), and 

3 ‘‘(IV) any amount which is in4 cluded in income under section 860C to 

5 the extent that such amount does not 

6 exceed an excess inclusion with respect 

7 to a REMIC. 

8 ‘‘(ii) QUALIFIED REIT DIVIDEND.—For 

9 purposes of clause (i)(I), the term ‘qualified 

10 REIT dividend’ means any dividend re11 ceived from or paid by a real estate invest12 ment trust if such dividend is paid with re13 spect to a class of shares that is publicly 

14 traded and the recipient of the dividend is 

15 a person who holds an interest in any class 

16 of shares of the real estate investment trust 

17 of not more than 5 percent. 

18 ‘‘(C) APPLICABLE PERCENTAGE.—For pur19 poses of applying subparagraph (A)(i)— 

20 ‘‘(i) IN GENERAL.—Except as provided 

21 in clause (ii), the term ‘applicable percent22 age’ means 10 percent. 

23 ‘‘(ii) SPECIAL RULES FOR DIVI24 DENDS.— In the case of any dividend in re25 spect of stock received by or paid to a qualiVerDate Sep 11 2014 00:08 Jan 24, 2024 Jkt 049200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6203 E:\BILLS\H7024.RH H7024

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1 fied resident of Taiwan, the applicable per2 centage shall be 15 percent (10 percent in 

3 the case of a dividend which meets the re4 quirements of subparagraph (D) and is re5 ceived by or paid to an entity taxed as a 

6 corporation in Taiwan). 

7 ‘‘(D) REQUIREMENTS FOR LOWER DIVIDEND

8 RATE.— 

9 ‘‘(i) IN GENERAL.—The requirements 

10 of this subparagraph are met with respect 

11 to any dividend in respect of stock in a cor12 poration if, at all times during the 12- 

13 month period ending on the date such stock 

14 becomes ex-dividend with respect to such 

15 dividend— 

16 ‘‘(I) the dividend is derived by a 

17 qualified resident of Taiwan, and 

18 ‘‘(II) such qualified resident of 

19 Taiwan has held directly at least 10 

20 percent (by vote and value) of the total 

21 outstanding shares of stock in such cor22 poration. 

23 For purposes of subclause (II), a person 

24 shall be treated as directly holding a share 

25 of stock during any period described in the 


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1 preceding sentence if the share was held by 

2 a corporation from which such person later 

3 acquired that share and such corporation 

4 was, at the time the share was acquired, 

5 both a connected person to such person and 

6 a qualified resident of Taiwan. 

7 ‘‘(ii) EXCEPTION FOR RICS AND

8 REITS.—Notwithstanding clause (i), the re9 quirements of this subparagraph shall not 

10 be treated as met with respect to any divi11 dend paid by a regulated investment com12 pany or a real estate investment trust. 

13 ‘‘(2) QUALIFIED WAGES.— 

14 ‘‘(A) IN GENERAL.—No tax shall be imposed 

15 under this chapter (and no amount shall be 

16 withheld under section 1441(a) or chapter 24) 

17 with respect to qualified wages paid to a quali18 fied resident of Taiwan who— 

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

20 States (determined without regard to sub21 section (c)(3)(E)), or 

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

23 regular component of a ship or aircraft op24 erated in international traffic. 

25 ‘‘(B) QUALIFIED WAGES.— 


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1 ‘‘(i) IN GENERAL.—The term ‘qualified 

2 wages’ means wages, salaries, or similar re3 munerations with respect to employment in4 volving the performance of personal services 

5 within the United States which— 

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

7 any employer other than a United 

8 States person, and 

9 ‘‘(II) are not borne by a United 

10 States permanent establishment of any 

11 person other than a United States per12 son. 

13 ‘‘(ii) EXCEPTIONS.—Such term shall 

14 not include directors’ fees, income derived as 

15 an entertainer or athlete, income derived as 

16 a student or trainee, pensions, amounts 

17 paid with respect to employment with the 

18 United States, any State (or political sub19 division thereof), or any possession of the 

20 United States (or any political subdivision 

21 thereof), or other amounts specified in regu22 lations or guidance under subsection 

23 (f)(1)(F). 

24 ‘‘(3) INCOME DERIVED FROM ENTERTAINMENT

25 OR ATHLETIC ACTIVITIES.— 


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1 ‘‘(A) IN GENERAL.—No tax shall be imposed 

2 under this chapter (and no amount shall be 

3 withheld under section 1441(a) or chapter 24) 

4 with respect to income derived by an entertainer 

5 or athlete who is a qualified resident of Taiwan 

6 from personal activities as such performed in the 

7 United States if the aggregate amount of gross 

8 receipts from such activities for the taxable year 

9 do not exceed $30,000. 

10 ‘‘(B) EXCEPTION.—Subparagraph (A) shall 

11 not apply with respect to— 

12 ‘‘(i) income which is qualified wages 

13 (as defined in paragraph (2)(B), deter14 mined without regard to clause (ii) thereof), 

15 or 

16 ‘‘(ii) income which is effectively con17 nected with a United States permanent es18 tablishment. 

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

20 PERMANENT ESTABLISHMENT OF A QUALIFIED RESIDENT

21 OF TAIWAN.— 

22 ‘‘(1) IN GENERAL.— 

23 ‘‘(A) IN GENERAL.—In lieu of applying sec24 tions 871(b) and 882, a qualified resident of 

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1 in the United States through a United States 

2 permanent establishment shall be taxable as pro3 vided in section 1, 11, 55, or 59A, on its taxable 

4 income which is effectively connected with such 

5 permanent establishment. 

6 ‘‘(B) DETERMINATION OF TAXABLE IN7 COME.—In determining taxable income for pur8 poses of paragraph (1), gross income includes 

9 only gross income which is effectively connected 

10 with the permanent establishment. 

11 ‘‘(2) TREATMENT OF DISPOSITIONS OF UNITED

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

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

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

15 business within the United States through a 

16 United States permanent establishment’ for ‘were 

17 engaged in a trade or business within the United 

18 States’, and 

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

20 permanent establishment’ for ‘such trade or busi21 ness’. 

22 ‘‘(3) TREATMENT OF BRANCH PROFITS TAXES.— 

23 In the case of any corporation which is a qualified 

24 resident of Taiwan, section 884 shall be applied— 


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

2 percent ’ in subsection (a) thereof, and 

3 ‘‘(B) by substituting ‘a United States per4 manent establishment of a qualified resident of 

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

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

7 thereof. 

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

9 DERIVED FROM CERTAIN ENTERTAINMENT OR ATH10 LETIC ACTIVITIES.— 

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

12 not apply to the extent that the income is de13 rived— 

14 ‘‘(i) in respect of entertainment or ath15 letic activities performed in the United 

16 States, and 

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

18 who is not the entertainer or athlete per19 forming such activities. 

20 ‘‘(B) EXCEPTION.—Subparagraph (A) shall 

21 not apply if the person described in subpara22 graph (A)(ii) is contractually authorized to des23 ignate the individual who is to perform such ac24 tivities. 


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1 ‘‘(5) SPECIAL RULE WITH RESPECT TO CERTAIN

2 AMOUNTS.—Paragraph (1) shall not apply to any in3 come which is wages, salaries, or similar remunera4 tion with respect to employment or with respect to 

5 any amount which is described in subsection 

6 (a)(2)(B)(ii). 

7 ‘‘(c) QUALIFIED RESIDENT OF TAIWAN.—For purposes 

8 of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘qualified resident 

10 of Taiwan’ means any person who— 

11 ‘‘(A) is liable to tax under the laws of Tai12 wan by reason of such person’s domicile, resi13 dence, place of management, place of incorpora14 tion, or any similar criterion, 

15 ‘‘(B) is not a United States person (deter16 mined without regard to paragraph (3)(E)), and 

17 ‘‘(C) in the case of an entity taxed as a cor18 poration in Taiwan, meets the requirements of 

19 paragraph (2). 

20 ‘‘(2) LIMITATION ON BENEFITS FOR CORPORATE

21 ENTITIES OF TAIWAN.— 

22 ‘‘(A) IN GENERAL.—Subject to subpara23 graphs (E) and (F), an entity meets the require24 ments of this paragraph only if it— 


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1 ‘‘(i) meets the ownership and income 

2 requirements of subparagraph (B), 

3 ‘‘(ii) meets the publicly traded require4 ments of subparagraph (C), or 

5 ‘‘(iii) meets the qualified subsidiary re6 quirements of subparagraph (D). 

7 ‘‘(B) OWNERSHIP AND INCOME REQUIRE8 MENTS.—The requirements of this subparagraph 

9 are met for an entity if— 

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

11 value) of the total outstanding shares of 

12 stock in such entity are owned directly or 

13 indirectly by qualified residents of Taiwan, 

14 and 

15 ‘‘(ii) less than 50 percent of such enti16 ty’s gross income (and in the case of an en17 tity that is a member of a tested group, less 

18 than 50 percent of the tested group’s gross 

19 income) is paid or accrued, directly or indi20 rectly, in the form of payments that are de21 ductible for purposes of the income taxes 

22 imposed by Taiwan, to persons who are 

23 not— 

24 ‘‘(I) qualified residents of Taiwan, 

25 or 


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1 ‘‘(II) United States persons who 

2 meet such requirements with respect to 

3 the United States as determined by the 

4 Secretary to be equivalent to the re5 quirements of this subsection (deter6 mined without regard to paragraph 

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

8 Taiwan. 

9 ‘‘(C) PUBLICLY TRADED REQUIREMENTS.— 

10 An entity meets the requirements of this sub11 paragraph if— 

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

13 (and any disproportionate class of shares) 

14 of such entity are primarily and regularly 

15 traded on an established securities market 

16 in Taiwan, or 

17 ‘‘(ii) the primary place of management 

18 and control of the entity is in Taiwan and 

19 all classes of its outstanding shares de20 scribed in clause (i) are regularly traded on 

21 an established securities market in Taiwan. 

22 ‘‘(D) QUALIFIED SUBSIDIARY REQUIRE23 MENTS.—An entity meets the requirement of this 

24 subparagraph if— 


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

2 value) of the total outstanding shares of the 

3 stock of such entity are owned directly or 

4 indirectly by 5 or fewer entities— 

5 ‘‘(I) which meet the requirements 

6 of subparagraph (C), or 

7 ‘‘(II) which are United States 

8 persons the principal class of the 

9 shares (and any disproportionate class 

10 of shares) of which are primarily and 

11 regularly traded on an established se12 curities market in the United States, 

13 and 

14 ‘‘(ii) the entity meets the requirements 

15 of clause (ii) of subparagraph (B). 

16 ‘‘(E) ONLY INDIRECT OWNERSHIP THROUGH

17 QUALIFYING INTERMEDIARIES COUNTED.— 

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

19 owned by a person indirectly through 1 or 

20 more other persons shall not be treated as 

21 owned by such person in determining 

22 whether the person meets the requirements 

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

24 such other persons are qualifying inter25 mediate owners. 


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1 ‘‘(ii) QUALIFYING INTERMEDIATE OWN2 ERS.—The term ‘qualifying intermediate 

3 owner’ means a person that is— 

4 ‘‘(I) a qualified resident of Tai5 wan, or 

6 ‘‘(II) a resident of any other for7 eign country (other than a foreign 

8 country that is a foreign country of 

9 concern) that has in effect a com10 prehensive convention with the United 

11 States for the avoidance of double tax12 ation. 

13 ‘‘(iii) SPECIAL RULE FOR QUALIFIED

14 SUBSIDIARIES.—For purposes of applying 

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

16 intermediate owner’ shall include any per17 son who is a United States person who 

18 meets such requirements with respect to the 

19 United States as determined by the Sec20 retary to be equivalent to the requirements 

21 of this subsection (determined without re22 gard to paragraph (1)(B)) with respect to 

23 residents of Taiwan. 

24 ‘‘(F) CERTAIN PAYMENTS NOT INCLUDED.— 

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1 paragraph (B)(ii) or (D)(ii) are met with re2 spect to an entity, the following payments shall 

3 not be taken into account: 

4 ‘‘(i) Arm’s-length payments by the en5 tity in the ordinary course of business for 

6 services or tangible property. 

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

8 intra-group transactions. 

9 ‘‘(3) DUAL RESIDENTS.— 

10 ‘‘(A) RULES FOR DETERMINATION OF STA11 TUS.— 

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

13 is an applicable dual resident and who is 

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

15 shall be treated as a qualified resident of 

16 Taiwan. 

17 ‘‘(ii) APPLICABLE DUAL RESIDENT.— 

18 For purposes of this paragraph, the term 

19 ‘applicable dual resident’ means an indi20 vidual who— 

21 ‘‘(I) is not a United States cit22 izen, 

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

24 States (determined without regard to 

25 subparagraph (E)), and 


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1 ‘‘(III) would be a qualified resi2 dent of Taiwan but for paragraph 

3 (1)(B). 

4 ‘‘(B) PERMANENT HOME.—An individual is 

5 described in this subparagraph if such indi6 vidual— 

7 ‘‘(i) has a permanent home available to 

8 such individual in Taiwan, and 

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

10 available to such individual in the United 

11 States. 

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

13 individual is described in this subparagraph if— 

14 ‘‘(i) such individual has a permanent 

15 home available to such individual in both 

16 Taiwan and the United States, and 

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

18 economic relations (center of vital interests) 

19 are closer to Taiwan than to the United 

20 States. 

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

22 described in this subparagraph if— 

23 ‘‘(i) such individual— 


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1 ‘‘(I) does not have a permanent 

2 home available to such individual in 

3 either Taiwan or the United States, or 

4 ‘‘(II) has a permanent home 

5 available to such individual in both 

6 Taiwan and the United States but 

7 such individual’s center of vital inter8 ests under subparagraph (C)(ii) cannot 

9 be determined, and 

10 ‘‘(ii) such individual has a habitual 

11 abode in Taiwan and not the United States. 

12 ‘‘(E) UNITED STATES TAX TREATMENT OF

13 QUALIFIED RESIDENT OF TAIWAN.—Notwith14 standing section 7701, an individual who is 

15 treated as a qualified resident of Taiwan by rea16 son of this paragraph for all or any portion of 

17 a taxable year shall not be treated as a resident 

18 of the United States for purposes of computing 

19 such individual’s United States income tax li20 ability for such taxable year or portion thereof. 

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

22 ‘‘(A) DIVIDENDS.—For purposes of apply23 ing this section to any dividend, paragraph 

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

25 (ii) thereof. 


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1 ‘‘(B) ITEMS OF INCOME EMANATING FROM

2 AN ACTIVE TRADE OR BUSINESS IN TAIWAN.— 

3 For purposes of this section— 

4 ‘‘(i) IN GENERAL.—Notwithstanding 

5 the preceding paragraphs of this subsection, 

6 if an entity taxed as a corporation in Tai7 wan is not a qualified resident of Taiwan 

8 but meets the requirements of subpara9 graphs (A) and (B) of paragraph (1), any 

10 qualified item of income such entity derived 

11 from the United States shall be treated as 

12 income of a qualified resident of Taiwan. 

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

14 ‘‘(I) IN GENERAL.—The term 

15 ‘qualified item of income’ means any 

16 item of income which emanates from, 

17 or is incidental to, the conduct of an 

18 active trade or business in Taiwan 

19 (other than operating as a holding 

20 company, providing overall super21 vision or administration of a group of 

22 companies, providing group financing, 

23 or making or managing investments 

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1 surance company, or registered securi2 ties dealer in the ordinary course of its 

3 business as such)). 

4 ‘‘(II) SUBSTANTIAL ACTIVITY RE5 QUIREMENT.—An item of income 

6 which is derived from a trade or busi7 ness conducted in the United States or 

8 from a connected person shall be a 

9 qualified item of income only if the 

10 trade or business activity conducted in 

11 Taiwan to which the item is related is 

12 substantial in relation to the same or 

13 a complementary trade or business ac14 tivity carried on in the United States. 

15 For purposes of applying this sub16 clause, activities conducted by persons 

17 that are connected to the entity de18 scribed in clause (i) shall be deemed to 

19 be conducted by such entity. 

20 ‘‘(iii) EXCEPTION.—This subparagraph 

21 shall not apply to any item of income de22 rived by an entity if at least 50 percent (by 

23 vote or value) of such entity is owned (di24 rectly or indirectly) or controlled by resi25 dents of a foreign country of concern. 


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

2 purposes of this section— 

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

5 ‘‘(A) IN GENERAL.—The term ‘United 

6 States permanent establishment’ means, with re7 spect to a qualified resident of Taiwan, a perma8 nent establishment of such resident which is 

9 within the United States. 

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

11 whether there is a permanent establishment of a 

12 qualified resident of Taiwan within the United 

13 States shall be made without regard to whether 

14 an entity which is taxed as a corporation in 

15 Taiwan and which is a qualified resident of Tai16 wan 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 bed 

17 and its subsoil and their natural resources, 

18 constitutes a permanent establishment only 

19 if it lasts, or the activities of the rig or ship 

20 lasts, for more than 12 months. 

21 ‘‘(ii) DETERMINATION OF 12-MONTH

22 PERIOD.—For purposes of clause (i), the pe23 riod over which a building site or construc24 tion or installation project of a person lasts 

25 shall include any period of more than 30 


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1 days during which such person does not 

2 carry on activities at such building site or 

3 construction or installation project but con4 nected 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 (A) 

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

11 an independent status to whom subparagraph 

12 (D)(ii) applies) is acting on behalf of a trade or 

13 business of a qualified resident of Taiwan and 

14 has and habitually exercises an authority to con15 clude contracts that are binding on the trade or 

16 business, that trade or business shall be deemed 

17 to have a permanent establishment in the coun18 try in which such authority is exercised in re19 spect of any activities that the person undertakes 

20 for the trade or business, unless the activities of 

21 such person are limited to those described in sub22 paragraph (D)(i) that, if exercised through a 

23 fixed place of business, would not make this fixed 

24 place of business a permanent establishment 

25 under the provisions of that subparagraph. 


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1 ‘‘(D) EXCLUSIONS.— 

2 ‘‘(i) IN GENERAL.—Notwithstanding 

3 subparagraphs (A) and (B), the term ‘per4 manent establishment’ shall not include— 

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

6 the purpose of storage, display, or de7 livery of goods or merchandise belong8 ing to the trade or business, 

9 ‘‘(II) the maintenance of a stock 

10 of goods or merchandise belonging to 

11 the trade or business solely for the pur12 pose of storage, display, or delivery, 

13 ‘‘(III) the maintenance of a stock 

14 of goods or merchandise belonging to 

15 the trade or business solely for the pur16 pose of processing by another trade or 

17 business, 

18 ‘‘(IV) the maintenance of a fixed 

19 place of business solely for the purpose 

20 of purchasing goods or merchandise, or 

21 of collecting information, for the trade 

22 or business, 

23 ‘‘(V) the maintenance of a fixed 

24 place of business solely for the purpose 

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1 ness, any other activity of a pre2 paratory or auxiliary character, or 

3 ‘‘(VI) the maintenance of a fixed 

4 place of business solely for any com5 bination of the activities mentioned in 

6 subclauses (I) through (V), provided 

7 that the overall activity of the fixed 

8 place of business resulting from this 

9 combination is of a preparatory or 

10 auxiliary character. 

11 ‘‘(ii) BROKERS AND OTHER INDE12 PENDENT AGENTS.—A trade or business 

13 shall not be considered to have a permanent 

14 establishment in a country merely because 

15 it carries on business in such country 

16 through a broker, general commission agent, 

17 or any other agent of an independent sta18 tus, provided that such persons are acting 

19 in the ordinary course of their business as 

20 independent agents. 

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

22 includes, with respect to any entity taxed as a cor23 poration in Taiwan, such entity and any other entity 

24 taxed as a corporation in Taiwan that— 


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

2 entity in a tax consolidation, fiscal unity, or 

3 similar regime that requires members of the 

4 group to share profits or losses, or 

5 ‘‘(B) shares losses with such entity pursuant 

6 to a group relief or other loss sharing regime. 

7 ‘‘(4) CONNECTED PERSON.—Two persons shall be 

8 ‘connected persons’ if one owns, directly or indirectly, 

9 at least 50 percent of the interests in the other (or, 

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

11 aggregate vote and value of the corporation’s shares) 

12 or another person owns, directly or indirectly, at least 

13 50 percent of the interests (or, in the case of a cor14 poration, at least 50 percent of the aggregate vote and 

15 value of the corporation’s shares) in each person. In 

16 any case, a person shall be connected to another if, 

17 based on all the relevant facts and circumstances, one 

18 has control of the other or both are under the control 

19 of the same person or persons. 

20 ‘‘(5) FOREIGN COUNTRY OF CONCERN.—The term 

21 ‘foreign country of concern’ has the meaning given 

22 such term under paragraph (7) of section 9901 of the 

23 William M. (Mac) Thornberry National Defense Au24 thorization Act for Fiscal Year 2021 (15 U.S.C. 


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1 4651(7)), as added by section 103(a)(4) of the CHIPS 

2 Act of 2022). 

3 ‘‘(6) PARTNERSHIPS; BENEFICIARIES OF ES4 TATES AND TRUSTS.—For purposes of this section— 

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

6 is a partner of a partnership which carries on 

7 a trade or business within the United States 

8 through a United States permanent establish9 ment shall be treated as carrying on such trade 

10 or business through such permanent establish11 ment, and 

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

13 is a beneficiary of an estate or trust which car14 ries on a trade or business within the United 

15 States through a United States permanent estab16 lishment shall be treated as carrying on such 

17 trade or business through such permanent estab18 lishment. 

19 ‘‘(7) DENIAL OF BENEFITS FOR CERTAIN PAY20 MENTS THROUGH HYBRID ENTITIES.—For purposes of 

21 this section, rules similar to the rules of section 894(c) 

22 shall apply. 

23 ‘‘(e) APPLICATION.— 

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

25 to any period unless the Secretary has determined 


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1 that Taiwan has provided benefits to United States 

2 persons for such period that are reciprocal to the ben3 efits provided to qualified residents of Taiwan under 

4 this section. 

5 ‘‘(2) PROVISION OF RECIPROCITY.—The Presi6 dent or his designee is authorized to exchange letters, 

7 enter into an agreement, or take other necessary and 

8 appropriate steps relative to Taiwan for the recip9 rocal provision of the benefits described in this sec10 tion. 

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

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

13 such regulations or other guidance as may be nec14 essary or appropriate to carry out the provisions of 

15 this section, including such regulations or guidance 

16 for— 

17 ‘‘(A) determining— 

18 ‘‘(i) what constitutes a United States 

19 permanent establishment of a qualified resi20 dent of Taiwan, and 

21 ‘‘(ii) income that is effectively con22 nected with such a permanent establish23 ment, 

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

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


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1 should not be treated as) qualified residents of 

2 Taiwan, 

3 ‘‘(C) requirements for record keeping and 

4 reporting, 

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

6 employers in determining whether a foreign per7 son is a qualified resident of Taiwan for pur8 poses of determining whether withholding or re9 porting is required for a payment (and, if with10 holding is required, whether it should be applied 

11 at a reduced rate), 

12 ‘‘(E) the application of subsection 

13 (a)(1)(D)(i) to stock held by predecessor owners, 

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

15 treated as qualified wages for purposes of sub16 section (a)(2), 

17 ‘‘(G) determining the amounts to which sub18 section (a)(3) applies, 

19 ‘‘(H) defining established securities market 

20 for purposes of subsection (c), 

21 ‘‘(I) the application of the rules of sub22 section (c)(4)(B), 

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

24 and section 1446, 


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1 ‘‘(K) determining ownership interests held 

2 by residents of a foreign country of concern, and 

3 ‘‘(L) determining the starting and ending 

4 dates for periods with respect to the application 

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

6 be separate dates for taxes withheld at the source 

7 and other taxes. 

8 ‘‘(2) REGULATIONS TO BE CONSISTENT WITH

9 MODEL TREATY.—Any regulations or other guidance 

10 issued under this section shall, to the extent practical, 

11 be consistent with the provisions of the United States 

12 model income tax convention dated February 7, 

13 2016.’’. 

14 (b) CONFORMING AMENDMENT TO WITHHOLDING

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

16 at the end the following new section: 

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

18 TAIWAN. 

19 ‘‘For reduced rates of withholding for certain residents 

20 of Taiwan, see section 894A.’’. 

21 (c) CLERICAL AMENDMENTS.— 

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

23 II of subchapter N of chapter 1 is amended by insert24 ing after the item relating to section 894 the following 

25 new item: 

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


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

2 chapter 3 is amended by adding at the end the fol3 lowing new item: 

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

4 Subtitle B—United States-Taiwan 

5 Tax Agreement Authorization Act 

6 SEC. 311. SHORT TITLE. 

7 This subtitle may be cited as the ‘‘United States-Tai8 wan Tax Agreement Authorization Act’’. 

9 SEC. 312. DEFINITIONS. 

10 In this subtitle: 

11 (1) AGREEMENT.—The term ‘‘Agreement’’ means 

12 the tax agreement authorized by section 313(a). 

13 (2) APPROPRIATE CONGRESSIONAL COMMIT14 TEES.—The term ‘‘appropriate congressional commit15 tees’’ means— 

16 (A) the Committee on Foreign Relations 

17 and the Committee on Finance of the Senate; 

18 and 

19 (B) the Committee on Ways and Means of 

20 the House of Representatives. 

21 (3) APPROVAL LEGISLATION.—The term ‘‘ap22 proval legislation’’ means legislation that approves 

23 the Agreement. 

24 (4) IMPLEMENTING LEGISLATION.—The term 

25 ‘‘implementing legislation’’ means legislation that 


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1 makes any changes to the Internal Revenue Code of 

2 1986 necessary to implement the Agreement. 

3 SEC. 313. AUTHORIZATION TO NEGOTIATE AND ENTER 

4 INTO AGREEMENT. 

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

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

7 1986 (as added by the United States-Taiwan Expedited 

8 Double-Tax Relief Act), the President is authorized to nego9 tiate and enter into a tax agreement relative to Taiwan. 

10 (b) ELEMENTS OF AGREEMENT.— 

11 (1) CONFORMITY WITH BILATERAL INCOME TAX

12 CONVENTIONS.—The President shall ensure that— 

13 (A) any provisions included in the Agree14 ment conform with provisions customarily con15 tained in United States bilateral income tax 

16 conventions, as exemplified by the 2016 United 

17 States Model Income Tax Convention; and 

18 (B) the Agreement does not include elements 

19 outside the scope of the 2016 United States 

20 Model Income Tax Convention. 

21 (2) INCORPORATION OF TAX AGREEMENTS AND

22 LAWS.—Notwithstanding paragraph (1), the Agree23 ment may incorporate and restate provisions of any 

24 agreement, or existing United States law, addressing 


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1 double taxation for residents of the United States and 

2 Taiwan. 

3 (3) AUTHORITY.—The Agreement shall include 

4 the following statement: ‘‘The Agreement is entered 

5 into pursuant to the United States-Taiwan Tax 

6 Agreement Authorization Act.’’ 

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

8 include a provision conditioning entry into force 

9 upon— 

10 (A) enactment of approval legislation and 

11 implementing legislation pursuant to section 

12 317; and 

13 (B) confirmation by the Secretary of the 

14 Treasury that the relevant authority in Taiwan 

15 has approved and taken appropriate steps re16 quired to implement the Agreement. 

17 SEC. 314. CONSULTATIONS WITH CONGRESS. 

18 (a) NOTIFICATION UPON COMMENCEMENT OF NEGO19 TIATIONS.—The President shall provide written notification 

20 to the appropriate congressional committees of the com21 mencement of negotiations between the United States and 

22 Taiwan on the Agreement at least 15 calendar days before 

23 commencing such negotiations. 

24 (b) CONSULTATIONS DURING NEGOTIATIONS.— 


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

2 commencement of negotiations with respect to the 

3 Agreement, and every 180 days thereafter until the 

4 President enters into the Agreement, the President 

5 shall provide a briefing to the appropriate congres6 sional committees on the status of the negotiations, 

7 including a description of elements under negotiation. 

8 (2) MEETINGS AND OTHER CONSULTATIONS.— 

9 (A) IN GENERAL.—In the course of negotia10 tions with respect to the Agreement, the Sec11 retary of the Treasury, in coordination with the 

12 Secretary of State, shall— 

13 (i) meet, upon request, with the chair14 man or ranking member of any of the ap15 propriate congressional committees regard16 ing negotiating objectives and the status of 

17 negotiations in progress; and 

18 (ii) consult closely and on a timely 

19 basis with, and keep fully apprised of the 

20 negotiations, the appropriate congressional 

21 committees. 

22 (B) ELEMENTS OF CONSULTATIONS.—The 

23 consultations described in subparagraph (A) 

24 shall include consultations with respect to— 


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1 (i) the nature of the contemplated 

2 Agreement; 

3 (ii) how and to what extent the con4 templated Agreement is consistent with the 

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

6 (iii) the implementation of the con7 templated Agreement, including— 

8 (I) the general effect of the con9 templated Agreement on existing laws; 

10 (II) proposed changes to any ex11 isting laws to implement the con12 templated Agreement; and 

13 (III) proposed administrative ac14 tions to implement the contemplated 

15 Agreement. 

16 SEC. 315. APPROVAL AND IMPLEMENTATION OF AGREE17 MENT. 

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

19 force unless— 

20 (1) the President, at least 60 days before the day 

21 on which the President enters into the Agreement, 

22 publishes the text of the contemplated Agreement on 

23 a publicly available website of the Department of the 

24 Treasury; and 


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

2 Agreement, approval legislation and implementing 

3 legislation pursuant to section 317. 

4 (b) ENTRY INTO FORCE.—The President may provide 

5 for the Agreement to enter into force upon— 

6 (1) enactment of approval legislation and imple7 menting legislation pursuant to section 317; and 

8 (2) confirmation by the Secretary of the Treas9 ury that the relevant authority in Taiwan has ap10 proved and taken appropriate steps required to imple11 ment the Agreement. 

12 SEC. 316. SUBMISSION TO CONGRESS OF AGREEMENT AND 

13 IMPLEMENTATION POLICY. 

14 (a) SUBMISSION OF AGREEMENT.—Not later than 270 

15 days after the President enters into the Agreement, the 

16 President or the President’s designee shall submit to Con17 gress— 

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

19 (2) a technical explanation of the Agreement. 

20 (b) SUBMISSION OF IMPLEMENTATION POLICY.—Not 

21 later than 270 days after the President enters into the 

22 Agreement, the Secretary of the Treasury shall submit to 

23 Congress— 

24 (1) a description of those changes to existing 

25 laws that the President considers would be required in 


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1 order to ensure that the United States acts in a man2 ner consistent with the Agreement; and 

3 (2) a statement of anticipated administrative ac4 tion proposed to implement the Agreement. 

5 SEC. 317. CONSIDERATION OF APPROVAL LEGISLATION 

6 AND IMPLEMENTING LEGISLATION. 

7 (a) IN GENERAL.—The approval legislation with re8 spect to the Agreement shall include the following: ‘‘Con9 gress approves the Agreement submitted to Congress pursu10 ant to section 316 of the United States-Taiwan Tax Agree11 ment Authorization Act on llll.’’, with the blank 

12 space being filled with the appropriate date. 

13 (b) APPROVAL LEGISLATION COMMITTEE REFER14 RAL.—The approval legislation shall— 

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

16 on Foreign Relations; and 

17 (2) in the House of Representaives, be referred to 

18 the Committee on Ways and Means. 

19 (c) IMPLEMENTING LEGISLATION COMMITTEE REFER20 RAL.—The implementing legislation shall— 

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

22 on Finance; and 

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

24 to the Committee on Ways and Means. 


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1 SEC. 318. RELATIONSHIP OF AGREEMENT TO INTERNAL 

2 REVENUE CODE OF 1986. 

3 (a) INTERNAL REVENUE CODE OF 1986 TO CON4 TROL.—No provision of the Agreement or approval legisla5 tion, nor the application of any such provision to any per6 son or circumstance, which is inconsistent with any provi7 sion of the Internal Revenue Code of 1986, shall have effect. 

8 (b) CONSTRUCTION.—Nothing in this subtitle shall be 

9 construed— 

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

11 States; or 

12 (2) to limit any authority conferred under any 

13 law of the United States, 

14 unless specifically provided for in this subtitle. 

15 SEC. 319. AUTHORIZATION OF SUBSEQUENT TAX AGREE16 MENTS RELATIVE TO TAIWAN. 

17 (a) IN GENERAL.—Subsequent to the enactment of ap18 proval legislation and implementing legislation pursuant 

19 to section 317— 

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

21 shall be treated as including any tax agreement rel22 ative to Taiwan which supplements or supersedes the 

23 Agreement to which such approval legislation and im24 plementing legislation relates, and 

25 (2) the term ‘‘Agreement’’ shall be treated as in26 cluding such tax agreement. 


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1 (b) REQUIREMENTS, ETC., TO APPLY SEPARATELY.— 

2 The provisions of this subtitle (including section 314) shall 

3 be applied separately with respect to each tax agreement 

4 referred to in subsection (a). 

5 SEC. 320. UNITED STATES TREATMENT OF DOUBLE TAX6 ATION MATTERS WITH RESPECT TO TAIWAN. 

7 (a) FINDINGS.—Congress makes the following findings: 

8 (1) The United States addresses issues with re9 spect to double taxation with foreign countries by en10 tering into bilateral income tax conventions (known 

11 as tax treaties) with such countries, subject to the ad12 vice and consent of the Senate to ratification pursu13 ant to article II of the Constitution. 

14 (2) The United States has entered into more 

15 than sixty such tax treaties, which facilitate economic 

16 activity, strengthen bilateral cooperation, and benefit 

17 United States workers, businesses, and other United 

18 States taxpayers. 

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

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

21 with Taiwan, necessitating an agreement to address 

22 issues with respect to double taxation. 

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

24 United States to— 


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1 (1) provide for additional bilateral tax relief 

2 with respect to Taiwan, beyond that provided for in 

3 section 894A of the Internal Revenue Code of 1986 (as 

4 added by the United States-Taiwan Expedited Dou5 ble-Tax Relief Act), only after entry into force of an 

6 Agreement, as provided for in section 315, and only 

7 in a manner consistent with such Agreement; and 

8 (2) continue to provide for bilateral tax relief 

9 with sovereign states to address double taxation and 

10 other related matters through entering into bilateral 

11 income tax conventions, subject to the Senate’s advice 

12 and consent to ratification pursuant to article II of 

13 the Constitution. 

14 TITLE IV—ASSISTANCE FOR DIS15 ASTER-IMPACTED COMMU16 NITIES 

17 SEC. 401. SHORT TITLE. 

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

19 Relief Act of 2024’’. 

20 SEC. 402. EXTENSION OF RULES FOR TREATMENT OF CER21 TAIN DISASTER-RELATED PERSONAL CAS22 UALTY LOSSES. 

23 For purposes of applying section 304(b) of the Tax24 payer Certainty and Disaster Tax Relief Act of 2020, sec25 tion 301 of such Act shall be applied by substituting ‘‘the 


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1 Federal Disaster Tax Relief Act of 2024’’ for ‘‘this Act’’ each 

2 place it appears. 

3 SEC. 403. EXCLUSION FROM GROSS INCOME FOR COM4 PENSATION FOR LOSSES OR DAMAGES RE5 SULTING FROM CERTAIN WILDFIRES. 

6 (a) IN GENERAL.—For purposes of the Internal Rev7 enue Code of 1986, gross income shall not include any 

8 amount received by an individual as a qualified wildfire 

9 relief payment. 

10 (b) QUALIFIED WILDFIRE RELIEF PAYMENT.—For 

11 purposes of this section— 

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

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

14 behalf of an individual as compensation for losses, ex15 penses, or damages (including compensation for addi16 tional living expenses, lost wages (other than com17 pensation for lost wages paid by the employer which 

18 would have otherwise paid such wages), personal in19 jury, death, or emotional distress) incurred as a re20 sult of a qualified wildfire disaster, but only to the 

21 extent the losses, expenses, or damages compensated by 

22 such payment are not compensated for by insurance 

23 or otherwise. 

24 (2) QUALIFIED WILDFIRE DISASTER.—The term 

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1 clared disaster (as defined in section 165(i)(5)(A) of 

2 the Internal Revenue Code of 1986) declared, after 

3 December 31, 2014, as a result of any forest or range 

4 fire. 

5 (c) DENIAL OF DOUBLE BENEFIT.—Notwithstanding 

6 any other provision of the Internal Revenue Code of 1986— 

7 (1) no deduction or credit shall be allowed (to the 

8 person for whose benefit a qualified wildfire relief 

9 payment is made) for, or by reason of, any expendi10 ture to the extent of the amount excluded under this 

11 section with respect to such expenditure, and 

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

13 any property shall result from any amount excluded 

14 under this subsection with respect to such property. 

15 (d) LIMITATION ON APPLICATION.—This section shall 

16 only apply to qualified wildfire relief payments received by 

17 the individual during taxable years beginning after Decem18 ber 31, 2019, and before January 1, 2026. 

19 SEC. 404. EAST PALESTINE DISASTER RELIEF PAYMENTS. 

20 (a) DISASTER RELIEF PAYMENTS TO VICTIMS OF

21 EAST PALESTINE TRAIN DERAILMENT.—East Palestine 

22 train derailment payments shall be treated as qualified dis23 aster relief payments for purposes of section 139(b) of the 

24 Internal Revenue Code of 1986. 


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1 (b) EAST PALESTINE TRAIN DERAILMENT PAY2 MENTS.—For purposes of this section, the term ‘‘East Pal3 estine train derailment payment’’ means any amount re4 ceived by or on behalf of an individual as compensation 

5 for loss, damages, expenses, loss in real property value, clos6 ing costs with respect to real property (including realtor 

7 commissions), or inconvenience (including access to real 

8 property) resulting from the East Palestine train derail9 ment if such amount was provided by— 

10 (1) a Federal, State, or local government agency, 

11 (2) Norfolk Southern Railway, or 

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

13 Southern Railway or any related person. 

14 (c) TRAIN DERAILMENT.—For purposes of this section, 

15 the term ‘‘East Palestine train derailment’’ means the de16 railment of a train in East Palestine, Ohio, on February 

17 3, 2023. 

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

19 amounts received on or after February 3, 2023. 

20 TITLE V—MORE AFFORDABLE 

21 HOUSING 

22 SEC. 501. STATE HOUSING CREDIT CEILING INCREASE FOR 

23 LOW-INCOME HOUSING CREDIT. 

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


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

2 2023, 2024, and 2025,’’, and 

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

4 heading and inserting ‘‘CERTAIN CALENDAR YEARS’’. 

5 (b) EFFECTIVE DATE.—The amendments made by this 

6 section shall apply to calendar years after 2022. 

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

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

9 striking subparagraph (B) and inserting the following: 

10 ‘‘(B) SPECIAL RULE WHERE MINIMUM PER11 CENT OF BUILDINGS IS FINANCED WITH TAX-EX12 EMPT BONDS SUBJECT TO VOLUME CAP.—For 

13 purposes of subparagraph (A), paragraph (1) 

14 shall not apply to any portion of the credit al15 lowable under subsection (a) with respect to a 

16 building if— 

17 ‘‘(i) 50 percent or more of the aggre18 gate basis of such building and the land on 

19 which the building is located is financed by 

20 1 or more obligations described in subpara21 graph (A), or 

22 ‘‘(ii)(I) 30 percent or more of the ag23 gregate basis of such building and the land 

24 on which the building is located is financed 

25 by 1 or more qualified obligations, and 


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1 ‘‘(II) 1 or more of such qualified obli2 gations— 

3 ‘‘(aa) are part of an issue the 

4 issue date of which is after December 

5 31, 2023, and 

6 ‘‘(bb) provide the financing for 

7 not less than 5 percent of the aggregate 

8 basis of such building and the land on 

9 which the building is located. 

10 ‘‘(C) QUALIFIED OBLIGATION.—For pur11 poses of subparagraph (B)(ii), the term ‘qualified 

12 obligation’ means an obligation which is de13 scribed in subparagraph (A) and which is part 

14 of an issue the issue date of which is before Jan15 uary 1, 2026.’’. 

16 (b) EFFECTIVE DATE.— 

17 (1) IN GENERAL.—The amendment made by this 

18 section shall apply to buildings placed in service in 

19 taxable years beginning after December 31, 2023. 

20 (2) REHABILITATION EXPENDITURES TREATED

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

22 building with respect to which any expenditures are 

23 treated as a separate new building under section 

24 42(e) of the Internal Revenue Code of 1986, for pur25 poses of paragraph (1), both the existing building and 


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1 the separate new building shall be treated as having 

2 been placed in service on the date such expenditures 

3 are treated as placed in service under section 42(e)(4) 

4 of such Code. 

5 TITLE VI—TAX ADMINISTRATION 

6 AND ELIMINATING FRAUD 

7 SEC. 601. INCREASE IN THRESHOLD FOR REQUIRING IN8 FORMATION REPORTING WITH RESPECT TO 

9 CERTAIN PAYEES. 

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

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

12 (b) INFLATION ADJUSTMENT.—Section 6041 is amend13 ed by adding at the end the following new subsection: 

14 ‘‘(h) INFLATION ADJUSTMENT.—In the case of any cal15 endar year after 2024, the dollar amount in subsection (a) 

16 shall be increased by an amount equal to— 

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

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

19 under section 1(f)(3) for such calendar year, deter20 mined by substituting ‘calendar year 2023’ for ‘cal21 endar year 2016’ in subparagraph (A)(ii) thereof. 

22 If any increase under the preceding sentence is not a mul23 tiple of $100, such increase shall be rounded to the nearest 

24 multiple of $100.’’. 


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1 (c) APPLICATION TO REPORTING ON REMUNERATION

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

3 amended— 

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

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

6 amount in effect for such calendar year under section 

7 6041(a)’’, and 

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

9 $5,000 or more’’ and inserting ‘‘equals or exceeds the 

10 dollar amount in effect for such calendar year under 

11 section 6041(a)’’. 

12 (d) APPLICATION TO BACKUP WITHHOLDING.—Sec13 tion 3406(b)(6) is amended— 

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

15 inserting ‘‘the dollar amount in effect for such cal16 endar year under section 6041(a)’’, and 

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

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

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

20 (e) CONFORMING AMENDMENTS.— 

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

22 by striking ‘‘OF $600 OR MORE’’ and inserting ‘‘EX23 CEEDING THRESHOLD’’. 

24 (2) Section 6041(a) is amended by striking ‘‘tax25 able year’’ and inserting ‘‘calendar year’’. 


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1 (f) EFFECTIVE DATE.—The amendments made by this 

2 section shall apply with respect to payments made after De3 cember 31, 2023. 

4 SEC. 602. ENFORCEMENT PROVISIONS WITH RESPECT TO 

5 COVID-RELATED EMPLOYEE RETENTION 

6 CREDITS. 

7 (a) INCREASE IN ASSESSABLE PENALTY ON COVID– 

8 ERTC PROMOTERS FOR AIDING AND ABETTING UNDER9 STATEMENTS OF TAX LIABILITY.— 

10 (1) IN GENERAL.—If any COVID–ERTC pro11 moter is subject to penalty under section 6701(a) of 

12 the Internal Revenue Code of 1986 with respect to 

13 any COVID–ERTC document, notwithstanding para14 graphs (1) and (2) of section 6701(b) of such Code, 

15 the amount of the penalty imposed under such section 

16 6701(a) shall be the greater of— 

17 (A) $200,000 ($10,000, in the case of a nat18 ural person), or 

19 (B) 75 percent of the gross income derived 

20 (or to be derived) by such promoter with respect 

21 to the aid, assistance, or advice referred to in 

22 section 6701(a)(1) of such Code with respect to 

23 such document. 

24 (2) NO INFERENCE.—Paragraph (1) shall not be 

25 construed to create any inference with respect to the 


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1 proper application of the knowledge requirement of 

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

3 1986. 

4 (b) FAILURE TO COMPLY WITH DUE DILIGENCE RE5 QUIREMENTS TREATED AS KNOWLEDGE FOR PURPOSES OF

6 ASSESSABLE PENALTY FOR AIDING AND ABETTING UNDER7 STATEMENT OF TAX LIABILITY.—In the case of any 

8 COVID–ERTC promoter, the knowledge requirement of sec9 tion 6701(a)(3) of the Internal Revenue Code of 1986 shall 

10 be treated as satisfied with respect to any COVID–ERTC 

11 document with respect to which such promoter provided aid, 

12 assistance, or advice, if such promoter fails to comply with 

13 the due diligence requirements referred to in subsection 

14 (c)(1). 

15 (c) ASSESSABLE PENALTY FOR FAILURE TO COMPLY

16 WITH DUE DILIGENCE REQUIREMENTS.— 

17 (1) IN GENERAL.—Any COVID–ERTC promoter 

18 which provides aid, assistance, or advice with respect 

19 to any COVID–ERTC document and which fails to 

20 comply with due diligence requirements imposed by 

21 the Secretary with respect to determining eligibility 

22 for, or the amount of, any COVID-related employee 

23 retention tax credit, shall pay a penalty of $1,000 for 

24 each such failure. 


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1 (2) DUE DILIGENCE REQUIREMENTS.—Except as 

2 otherwise provided by the Secretary, the due diligence 

3 requirements referred to in paragraph (1) shall be 

4 similar to the due diligence requirements imposed 

5 under section 6695(g). 

6 (3) RESTRICTION TO DOCUMENTS USED IN CON7 NECTION WITH RETURNS OR CLAIMS FOR REFUND.— 

8 Paragraph (1) shall not apply with respect to any 

9 COVID–ERTC document unless such document con10 stitutes, or relates to, a return or claim for refund. 

11 (4) TREATMENT AS ASSESSABLE PENALTY, 

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

13 1986, the penalty imposed under paragraph (1) shall 

14 be treated in the same manner as a penalty imposed 

15 under section 6695(g). 

16 (5) SECRETARY.—For purposes of this sub17 section, the term ‘‘Secretary’’ means the Secretary of 

18 the Treasury or the Secretary’s delegate. 

19 (d) ASSESSABLE PENALTIES FOR FAILURE TO DIS20 CLOSE INFORMATION, MAINTAIN CLIENT LISTS, ETC.—For 

21 purposes of sections 6111, 6112, 6707 and 6708 of the Inter22 nal Revenue Code of 1986— 

23 (1) any COVID-related employee retention tax 

24 credit (whether or not the taxpayer claims such 

25 COVID-related employee retention tax credit) shall be 


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1 treated as a listed transaction (and as a reportable 

2 transaction) with respect to any COVID–ERTC pro3 moter if such promoter provides any aid, assistance, 

4 or advice with respect to any COVID–ERTC docu5 ment relating to such COVID-related employee reten6 tion tax credit, and 

7 (2) such COVID–ERTC promoter shall be treat8 ed as a material advisor with respect to such trans9 action. 

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

11 section— 

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

13 promoter’’ means, with respect to any COVID–ERTC 

14 document, any person which provides aid, assistance, 

15 or advice with respect to such document if— 

16 (A) such person charges or receives a fee for 

17 such aid, assistance, or advice which is based on 

18 the amount of the refund or credit with respect 

19 to such document and, with respect to such per20 son’s taxable year in which such person provided 

21 such assistance or the preceding taxable year, the 

22 aggregate gross receipts of such person for aid, 

23 assistance, and advice with respect to all 

24 COVID-ERTC documents exceeds 20 percent of 


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1 the gross receipts of such person for such taxable 

2 year, or 

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

4 year in which such person provided such assist5 ance or the preceding taxable year— 

6 (i) the aggregate gross receipts of such 

7 person for aid, assistance, and advice with 

8 respect to all COVID–ERTC documents ex9 ceeds 50 percent of the gross receipts of such 

10 person for such taxable year, or 

11 (ii) both— 

12 (I) such aggregate gross receipts 

13 exceeds 20 percent of the gross receipts 

14 of such person for such taxable year, 

15 and 

16 (II) the aggregate gross receipts of 

17 such person for aid, assistance, and 

18 advice with respect to all COVID– 

19 ERTC documents (determined after 

20 application of paragraph (3)) exceeds 

21 $500,000. 

22 (2) EXCEPTION FOR CERTIFIED PROFESSIONAL

23 EMPLOYER ORGANIZATIONS.—The term ‘‘COVID– 

24 ERTC promoter’’ shall not include a certified profesVerDate Sep 11 2014 00:08 Jan 24, 2024 Jkt 049200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6203 E:\BILLS\H7024.RH H7024

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1 sional employer organization (as defined in section 

2 7705). 

3 (3) AGGREGATION RULE.—For purposes of para4 graph (1)(B)(ii)(II), all persons treated as a single 

5 employer under subsection (a) or (b) of section 52 of 

6 the Internal Revenue Code of 1986, or subsection (m) 

7 or (o) of section 414 of such Code, shall be treated as 

8 1 person. 

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

10 taxable year of less than 12 months, paragraph (1) 

11 shall be applied with respect to the calendar year in 

12 which such taxable year begins (in addition to apply13 ing to such taxable year). 

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

15 section, the term ‘‘COVID–ERTC document’’ means any re16 turn, affidavit, claim, or other document related to any 

17 COVID-related employee retention tax credit, including any 

18 document related to eligibility for, or the calculation or de19 termination of any amount directly related to any COVID20 related employee retention tax credit. 

21 (g) COVID-RELATED EMPLOYEE RETENTION TAX

22 CREDIT.—For purposes of this section, the term ‘‘COVID23 related employee retention tax credit’’ means— 

24 (1) any credit, or advance payment, under sec25 tion 3134 of the Internal Revenue Code of 1986, 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 COVID4 RELATED EMPLOYEE RETENTION TAX CREDITS.—Notwith5 standing section 6511 of the Internal Revenue Code of 1986 

6 or any other provision of law, no credit or refund of any 

7 COVID-related employee retention tax credit shall be al8 lowed or made after January 31, 2024, unless a claim for 

9 such credit or refund is filed by the taxpayer on or before 

10 such date. 

11 (i) AMENDMENTS TO EXTEND LIMITATION ON ASSESS12 MENT.— 

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 assess19 ment of any amount attributable to a credit claimed 

20 under this section shall not expire before the date that 

21 is 6 years after the latest of— 

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

23 which includes the calendar quarter with respect 

24 to which such credit is determined is filed, 


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1 ‘‘(B) the date on which such return is treat2 ed 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 CRED7 IT.— 

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

11 limitation on the time period for credit or refund 

12 of any amount attributable to a deduction for 

13 improperly claimed ERTC wages shall not ex14 pire before the time period for such assessment 

15 expires under paragraph (1). 

16 ‘‘(B) IMPROPERLY CLAIMED ERTC WAGES.— 

17 For purposes of this paragraph, the term ‘im18 properly claimed ERTC wages’ means, with re19 spect to an assessment attributable to a credit 

20 claimed under this section, the wages with re21 spect to which a deduction would not have been 

22 allowed if the portion of the credit to which such 

23 assessment relates had been properly 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 limi7 tation 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 years 

10 after the latest of— 

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

12 which includes the calendar quarter with respect 

13 to which such credit is determined is filed, 

14 ‘‘(B) the date on which such return is treat15 ed as filed under section 6501(b)(2) of such Code, 

16 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 CRED21 IT.— 

22 ‘‘(A) IN GENERAL.—Notwithstanding sec23 tion 6511 of such Code, in the case of an assess24 ment attributable to a credit claimed under this 

25 section, the limitation on the time period for 


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1 credit or refund of any amount attributable to a 

2 deduction for improperly claimed ERTC wages 

3 shall not expire before the time period for such 

4 assessment expires under paragraph (1). 

5 ‘‘(B) IMPROPERLY CLAIMED ERTC WAGES.— 

6 For purposes of this paragraph, the term ‘im7 properly claimed ERTC wages’ means, with re8 spect to an assessment attributable to a credit 

9 claimed under this section, the wages with re10 spect to which a deduction would not have been 

11 allowed if the portion of the credit to which such 

12 assessment relates had been properly claimed.’’. 

13 (j) EFFECTIVE DATES.— 

14 (1) IN GENERAL.—Except as otherwise provided 

15 in this subsection, the provisions of this section shall 

16 apply to aid, assistance, and advice provided after 

17 March 12, 2020. 

18 (2) DUE DILIGENCE REQUIREMENTS.—Sub19 sections (b) and (c) shall apply to aid, assistance, and 

20 advice provided after the date of the enactment of this 

21 Act. 

22 (3) LIMITATION ON CREDIT AND REFUND OF

23 COVID-RELATED EMPLOYEE RETENTION TAX CRED24 ITS.—Subsection (h) shall apply to credits and re25 funds allowed or made after January 31, 2024. 


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1 (4) AMENDMENTS TO EXTEND LIMITATION ON AS2 SESSMENT.—The amendments made by subsection (i) 

3 shall apply to assessments made after the date of the 

4 enactment of this Act. 

5 (k) TRANSITION RULE WITH RESPECT TO REQUIRE6 MENTS TO DISCLOSE INFORMATION, MAINTAIN CLIENT

7 LISTS, ETC.—Any return under section 6111 of the Internal 

8 Revenue Code of 1986, or list under section 6112 of such 

9 Code, required by reason of subsection (d) of this section 

10 to be filed or maintained, respectively, with respect to any 

11 aid, assistance, or advice provided by a COVID–ERTC pro12 moter with respect to a COVID–ERTC document before the 

13 date of the enactment of this Act, shall not be required to 

14 be so filed or maintained (with respect to such aid, assist15 ance or advice) before the date which is 90 days after such 

16 date. 

17 (l) PROVISIONS NOT TO BE CONSTRUED TO CREATE

18 NEGATIVE INFERENCES.— 

19 (1) NO INFERENCE WITH RESPECT TO APPLICA20 TION OF KNOWLEDGE REQUIREMENT TO PRE-ENACT21 MENT CONDUCT OF COVID-ERTC PROMOTERS, ETC.— 

22 Subsection (b) shall not be construed to create any in23 ference with respect to the proper application of sec24 tion 6701(a)(3) of the Internal Revenue Code of 1986 

25 with respect to any aid, assistance, or advice provided 


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1 by any COVID-ERTC promoter on or before the date 

2 of the enactment of this Act (or with respect to any 

3 other aid, assistance, or advice to which such sub4 section does not apply). 

5 (2) REQUIREMENTS TO DISCLOSE INFORMATION, 

6 MAINTAIN CLIENT LISTS, ETC.—Subsections (d) and 

7 (k) shall not be construed to create any inference with 

8 respect to whether any COVID-related employee reten9 tion tax credit is (without regard to subsection (d)) 

10 a listed transaction (or reportable transaction) with 

11 respect to any COVID–ERTC promoter; and, for pur12 poses of subsection (j), a return or list shall not be 

13 treated as required (with respect to such aid, assist14 ance, or advice) by reason of subsection (d) if such re15 turn or list would be so required without regard to 

16 subsection (d). 

17 (m) REGULATIONS.—The Secretary (as defined in sub18 section (c)(5)) shall issue such regulations or other guidance 

19 as may be necessary or appropriate to carry out the pur20 poses of this section (and the amendments made by this sec21 tion). 


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Union Calendar No. 288 

118TH CONGRESS 

2D SESSION H. R. 7024 

[Report No. 118–353, Part I] 

A BILL 

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 

JANUARY 23, 2024 

Reported from the Committee on Ways and Means with 

an amendment 

JANUARY 23, 2024 

Committee on Rules discharged; committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union 


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