What’s in H.R. 1, The New Tax Bill, and What It Means for SMACNA Contractors

• Bonus Depreciation (100%) Restored – Deduct 100% of qualifying property costs in the year placed in service, including past projects, to boost cash flow and tax savings. 
• Section 179 Expensing Expanded – Instantly expense up to $2.5 million in equipment or property purchases with new, higher limits and inflation adjustments. 
• Section 179D Energy-Efficient Deduction – Claim up to $5.00 per square foot for energy upgrades in new builds and renovations. This applies to both private owners and public building designers. The bill keeps the incentive in place but only until the end of 2026 when it ends. 
• The Advanced Manufacturing Investment Tax Credit is increased from 25% to 35% for technology-related projects, often Chip plants, started by the end of 2026.
• Section 45L Home Energy Credit – The incentive survived efforts to kill it, so homeowners get $2,500 to $5,000 per unit for building energy-efficient single-family or multifamily housing until the end of 2026. 
• Section 174/174A R&E Deduction Reinstated – Immediately deduct domestic R&D expenses instead of amortizing over five years, retroactive to 2022. 
• Section 41 R&D Tax Credit Enhanced – Continue claiming 6% to 20% credit on qualified research while also deducting those same costs under Section 174A. 
• Estate Tax Ceiling Raised – A permanent increase in the unified credit and GSTT exemption threshold from $10 million to $15 million per individual, indexed for inflation.
• SALT Allowance – Temporarily increases in the SALT cap to $40,000 from $10,000 with limitations until 2030 when the $10,000 threshold returns.
• The Section 199A deduction is made permanent at the deduction rate of 20%. Further, it limits the phase-in range for certain businesses by increasing the amount from $50,000 to $75,000 for non-joint tax returns and from $100,000 to $175,000 for joint returns.
• Excess Business Losses – The new Act makes permanent the excess business loss limitation allowed to the amount of aggregate gross income or gain attributable to trades or businesses of the taxpayer plus a threshold amount indexed for inflation ($313,000).
• Section 45U, Zero-Emission Nuclear Power PTC – Not modified; credit allowed through Dec. 31, 2032. 

SMACNA also appreciates the reconciliation process for demonstrating support for:

• The deductibility of employer-sponsored health insurance.
• Maintaining without changes the business state and local tax (SALT) deduction.
• Sustaining current law concerning treatment of the tax-free status of municipal bonds.