Tax Legislation
Watch

Date 9/11/2025 | Author: Bridget Uribe, CPA

On August 28, 2025, the IRS issued Revenue Procedure 2025-28, which finally answers how businesses should treat domestic research and experimental (R&E) costs for 2024 and subsequent years following the enactment of the One Big Beautiful Bill Act (OBBBA) in July 2025. 

The OBBBA reversed course for domestic R&E by creating new §174A, which allows for the immediate deduction of domestic R&E costs starting with tax years beginning after December 31, 2024.   

Foreign R&E expenditures remain subject to capitalization and 15-year amortization under amended §174. 

Key Provisions of Rev. Proc. 2025-28 

• Starting in 2025, domestic R&E expenses are deductible as incurred (under §174A). Taxpayers may instead elect to capitalize and amortize over 60 months. 
• Transition Relief for 2022–2024 costs: If the domestic R&E expenses were capitalized under TCJA rules, you can choose either: 
• Deduct the remaining unamortized balance in full in tax year 2025, or 
• Spread the deduction ratably over tax years 2025 and 2026. 

Small Business Taxpayers – Special Rules  

• Small business taxpayers (≤$31M average gross receipts; not tax shelter) have the following options: 
• May elect to apply §174A retroactively to tax years 2022–2024. 
• The election applies consistently across all years and removes the ability to use the transition relief outlined above. 
• For 2024 returns still on extension (due October 15, 2025), the election may be made with the original filing by attaching the required statement. 
• If this election is made, the 2022 and 2023 tax returns must be amended. 
• The final deadline to make this retroactive election is July 6, 2026. Small businesses must also file their amended returns for 2022 and 2023 by that date. 

Large Corporations 

• These taxpayers are not eligible for the small business retroactive election outlined above, but instead: 
• They must continue to follow TCJA capitalization rules for 2022–2024; and 
• Then, use the transition relief to deduct the remaining unamortized balance in the 2025 tax year or spread it evenly over the 2025–2026 tax year.

Additional Highlights

• Interaction with the R&D credit: Domestic R&E deductions still need to be coordinated with the §280C rules. Rev. Proc. 2025-28 also allows small businesses to make or revoke late elections tied to the credit for earlier years. 
• Relief for early filers: Businesses that filed 2024 returns before September 15, 2025, have six extra months to file a superseding return to take advantage of these new elections.

What Businesses Should Do Now 

1. Determine eligibility: Are you a small business under the $31M gross receipts test, or a larger taxpayer subject to transition relief only? 
2. Model the options: For some, accelerating deductions in 2025 will be more beneficial; for others, the retroactive election could provide refunds for earlier years. 
3. Review your 2024 return status: If you’re on extension through October, you can still make the election directly with your filing. 
4. Prepare for amended filings: Small business taxpayers making the retroactive election must amend 2022 and 2023 returns by July 6, 2026. 
5. Coordinate with credits: Make sure any decision aligns with your R&D credit strategy. 

WG monitors IRS guidance and can assist in evaluating how these updates may affect your business operations and planning.

Date 8/21/2025 | Author: Stephanie Holston, CPA

The IRS seems to be ramping up its processing of Employee Retention Credit (ERC) claims and has been issuing refunds in recent months.  While the flow of funds may be welcome news to taxpayers, the receipt of the refund requires a review of the income tax treatment.

Tax Treatment of Received Claims

The original guidance provided by the IRS was that any wages used for the ERC claims were not deductible in the year the claim related to.  This would, in many cases, have required an amended income tax return to be filed for 2020 or 2021; however, in March 2025, the IRS updated its frequently asked questions on ERC.  Taxpayers who did not adjust wage expense in 2020 or 2021 and subsequently received a refund for an ERC claim should now include the refund in income when it is received.  Any interest received as part of an ERC refund should be treated as taxable in the year received, regardless of the year the wage deduction was disallowed.

The treatment of ERC for state tax purposes would vary by state.  Generally, New Jersey follows the Federal treatment and would not allow a deduction of wages pertaining to an ERC claim in the year the wages were paid.  New Jersey has not provided specific instructions related to the recent IRS updated guidance, but hopefully, it will continue to follow the IRS treatment.

Denied Claims

The IRS continues to be concerned that ERC claims may have been filed erroneously.  The IRS has the ability to claw back any ERC refund after if it is paid if the claim is determined to be invalid.  The statute of limitations for review of the claims can, in some cases, be as long as 6 years from the date the refund is received.  In cases of fraud, there is no statute of limitations so that the IRS could review these claims indefinitely.

The IRS updated guidance also allows taxpayers to deduct additional wage expense in the year an ERC claim is denied if the taxpayer disallowed wages originally on its 2020 or 2021 return related to an ERC claim.

The fact that the IRS has recently increased payments of ERC claims is welcome news to many taxpayers who have been waiting for refunds for, in some cases, years.  However, the issuance of these refunds can create additional complexity.  It’s important to discuss any refund received or claim denials with your tax advisor.

Please contact your WG advisor with any questions or additional information about the information in this article.

Date: 8/5/2025 | Author: Len Nitti, CPA, MST

When new tax legislation is passed, most industries will see some provisions that positively impact them and others that may not be as favorable. The One Big Beautiful Bill Act (OBBB) includes several provisions that benefit real estate investors and developers, along with a few offsetting changes.

One common theme in this legislation was the permanent extension and/or modification of a number of key provisions of the Tax Cuts and Jobs Act. As with any tax law, permanency simply means it doesn’t expire, and it would require a newly enacted law to make future changes to any of these provisions.

This article focuses on a few of the tax provisions that will impact real estate investors and developers, although there will likely be others that may be impactful.

100% Bonus Depreciation is Restored for 2025 and Beyond

Bonus depreciation was initially scheduled to be 40% for 2025 for assets with a depreciable life of under 20 years. The OBBB has now permanently restored 100% bonus depreciation for qualifying fixed assets placed in service after January 19, 2025. To qualify, the fixed assets must not have a binding written contract in place before this date.

Additionally, a new expensing election was created for portions of nonresidential real estate being used for qualified production activities. To qualify, construction must begin on the building after January 19, 2025, and before January 1, 2029, while it must be placed in service before January 1, 2031. It’s important to note that this benefit is not available to lessors of the property.

Qualified Opportunity Zone Program Permanently Extended and Modified

The qualified opportunity zone (QOZ) program has been extended to new investments made after December 31, 2026. Capital gains will continue to qualify for tax deferral along with up to $10,000 of ordinary income. The tax deferral will last for up to five years or when the investment is sold, whichever occurs earlier. For investments held for the full five years, a 10% basis increase (30% for rural QOZs) will be allowed to reduce the gain recognized.  Similar to the original program, QOZ investments held for at least 10 years (up to 30 years) will receive a basis increase to fair market value upon sale to offset any future appreciation.  The 180-day reinvestment period remains the same as the original program. Additionally, new zones will be designated as part of the program.

Although it was speculated earlier in the process, the original QOZ program remained unchanged. Qualified investments under the original program remained subject to the benefits and provisions of the Tax Cuts and Jobs Act (TCJA) and subsequently issued tax regulations.

Section 199A Deduction Permanently Extended

The TCJA had created an up to 20% deduction for qualified business income of individuals and trusts under Section 199A of the tax code to potentially reduce the tax rate on qualifying business income. This deduction was set to expire in 2026 but has now been permanently extended. Beginning in 2026, a new minimum deduction of $400 is available for taxpayers with a qualifying income of $1,000 or more. Another item of note is that REIT dividends will continue to qualify for this deduction going forward. The continuation of Section 199A preserves the reduced tax rate for qualifying real estate businesses.

Adjustment to the Interest Expense Limitation

Two significant changes were made to the interest expense limitation created by the TCJA. The legislation modifies the definition of ‘adjusted taxable income’ to be calculated before depreciation and amortization expenses. This creates a higher taxable income threshold when applying the 30% limitation to applicable entities (large taxpayers and tax shelters). Qualifying real estate businesses have the option to elect out of this limitation in exchange for slower depreciation lives on their real estate assets. This provision will likely result in fewer real estate businesses needing to make this election in the future.

A second, unfavorable change to the law addresses how to apply the limitation to capitalized interest expense. For taxpayers subject to the limitation who are required to capitalize any portion of their interest expense during a tax year, the calculated allowable interest expense will now be first applied against the interest expense being capitalized into fixed assets. This was thought to be a bit of a loophole in the original law, where interest expense being capitalized could be recovered through depreciation deductions and avoid the limitation altogether.

These changes will both apply to tax years beginning on or after December 31, 2024.

Phaseout of Certain Tax Breaks for Energy Efficient Improvements

The OBBB phases out or eliminates several existing green energy tax incentives. One of these benefits was the Energy Efficient Commercial Buildings Deduction permitted under Section 179D, which allowed for the immediate deduction of qualifying improvements to commercial buildings. This accelerated deduction has now been eliminated for buildings beginning construction after June 30, 2026.

Additionally, the New Energy Efficient Home Credit under Section 45L will be eliminated for energy-efficient homes acquired after June 30, 2026. This credit was allowed for energy-efficient homes developed or redeveloped by a contractor upon sale. The credit also applied to the development of certain energy-efficient multi-family buildings.

Although beyond the scope of this article, it is also worth noting that solar tax credits are being phased out ahead of schedule for residential and nonresidential installations.

OBBB’s Impact on the LIHTC

The OBBB made two key adjustments to the low-income housing tax credit program. First, the bill permanently increased the 9% credit allocated to each state by 12% beginning in 2026. The second change impacts the 4% credit by reducing the percentage of the project required to be financed by tax-exempt bonds from 50% to 25% beginning in 2026. To qualify for the 25% threshold, the bonds must be issued after December 31, 2025, and the building is placed-in-service after this date.

Other Relevant Provisions Not Addressed in Detail Above

• Permanent extension of the estate tax exemption
• Availability of the completed contract method to developers of high-rise condominium projects
• Ability to recognize the gain on the sale of qualifying farmland over four years
• Permanent extension of the limitation on active business losses
• Phaseout of other green energy tax incentives
• Permanent extension of the New Markets Tax Credit

Please contact your WG advisor with any questions or additional information about the information in this article.

Date: 8/4/2025 | Author: Darko Naumoski, CPA

On July 4, 2025, the President signed into law the “One, Big, Beautiful Bill,” a comprehensive tax reform that introduced several significant changes to the U.S. tax code. This article outlines the major international provisions of the new tax law.

Global Intangible Low-Taxed Income (GILTI)

First and foremost, Section 951A receives a new name: the well-known ‘GILTI’ will now be referred to as  ‘Net CFC Tested Income’ (NCTI).

The changes are as follows:

• The deduction under Section 250 (formerly GILTI deduction) will be reduced to 40% (from 50% before).
• The eligible foreign tax credit attributable to the NCTI will increase to 90% of the taxes deemed paid (previously was 80%).
• The Qualified Business Asset Investment (QBAI) — previously allowing foreign subsidiaries to reduce tested income by 10% of qualified assets — is now fully eliminated.
• The allocation of indirect group interest and R&E expenses to the tested income basket (for purposes of the foreign tax credit) is no longer required.
• In general, the effective date of the changes above is slated to take effect for tax years beginning after December 31, 2025.

The new law effectively raises the tax rate on foreign subsidiary income included in a U.S. parent’s taxable income to 14%, up from 10.5%.

Foreign-Derived Intangible Income (FDII)

This section of the law also gets a new name. The old ‘FDII’ will now be ‘FDDEI’ (Foreign Derived Deduction Eligible Income) deduction under Section IRC 250, with a reduction in its rate to 33.34% (from 37.5% before).

The changes are as follows:

• The law modifies the mechanism of allocation of expenses against the foreign-derived deduction eligible income by specifically excluding interest expense and research and experimental expenditures.
• As a favorable adjustment, the law repeals the reduction in FDDEI for the deemed return on qualified business asset investment (QBAI), similar to the GILTI provision. (This may also simplify compliance for tax preparers by slightly reducing the workload.). These changes are effective for tax years beginning after 2025.
• The bill would exclude from the FDDEI income classification income or gain from the Section 367(d) disposition of intangible property or property subject to depreciation, amortization, or depletion.
• The new exclusion will take effect for sales after June 16, 2025.

Like NCTI, the new FDDEI creates an effective tax rate of 14% for U.S. corporate taxpayers who derive operating income from foreign customers.

Base Erosion and Anti-Abuse Tax (BEAT)

The BEAT rate is increased from 10% to 10.5% (was scheduled to go up to 12.5%) for tax years beginning after 2025. The rest of the BEAT rules remain generally intact.

Reciprocal Tax for ‘Unfair Foreign Taxes’

In a big sigh of relief for Wall Street and foreign companies doing business in the U.S., the final bill omits the proposed Section 899, which would have imposed retaliatory taxes on residents of countries that impose “unfair foreign taxes.” This provision was removed after the Trump administration reached an agreement with the G-7 countries to exempt U.S. businesses from Pillar Two taxes.

Remittance Tax

The new law imposes a 1% excise tax on remittances of cash, money orders, cashier’s checks, or other similar physical instruments. However, transfers from most financial institution accounts or debit cards are exempt from this tax.

Other International Provisions

Several other international provisions are included in the law, effective for tax years beginning after December 31, 2025. These include:

• Making permanent the controlled foreign corporation (CFC) look-through under Section 954(c)(6)
  • This is an important aspect of planning for Subpart F inclusions.
• Restoring the exception from downward attribution rules under Section 958(b)(4)
  • This is welcome news, as many taxpayers were surprised by the reporting requirements and tax implications that resulted from the repeal of Section 958(b)(4) under the TCJA.
  • However, the new law establishes new Section 951B which takes a more surgical approach to stop the perceived abuse originally behind the TCJA repeal of the exception of downward attribution.
• Amending the FTC rules to treat up to 50% of inventory produced in the U.S. and sold through foreign branches as foreign-source income.
• Amending the pro-rata allocation rules under GILTI and Subpart F (to mimic more closely the U.S. pass-through business ownership rules).

The above summary provides an initial overview of the new tax law’s international provisions and their potential impact on our clients. Ongoing analysis and future guidance from the IRS and Treasury may lead to updates to the views expressed in this article. Please contact your WG tax advisor if you have any questions or concerns.

Date: 7/29/2025 | Author: Bridget Uribe, CPA

The “One, Big, Beautiful Bill” (2025 Act) was recently signed into law, bringing substantial business tax changes, many of which permanently restore provisions from the 2017 Tax Cuts and Jobs Act (TCJA) that were scheduled to expire. Below is a breakdown of the various business tax provisions contained in the 2025 Act, along with their implications for business taxpayers.

1. 100% Bonus Depreciation

Prior Law: The TCJA permitted 100% bonus depreciation for qualified property placed in service before January 1, 2023, followed by a gradual phase-down of the deduction to 80% in 2023, 60% in 2024, and further reductions thereafter.

New Law: The 2025 Act repeals the phasedown and permanently reinstates the 100% bonus depreciation deduction for qualified property placed in service after January 19, 2025. Qualified property includes tangible personal property with a recovery period of 20 years or less.

WG Observation: Clients with qualified assets should evaluate the timing of purchases and placement in service. Delaying until after Jan. 19, 2025, may unlock full expensing.

2. Section 179 Expensing Limits

Prior Law: Before the 2025 Act, the expensing limit under §179 was $1.22 million with a phase-out threshold beginning when the cost of §179 property placed in service during the tax year exceeded $3.05 million for tax year 2024 (adjusted for inflation).

New Law: The 2025 Act increases the maximum expensing amount to $2.5 million, with the phase-out threshold beginning at $4 million, effective for tax years beginning after December 31, 2024. These limits will be indexed for inflation in future years. The provision continues to apply to qualifying tangible personal property and certain qualified real property used in an active trade or business and remains subject to the taxable income limitation.

WG Observation: For small to mid-sized clients, §179 offers more control than bonus depreciation, especially in years with NOL limitations. §179 should be prioritized for clients who want to tailor deductions to taxable income levels.

3. Qualified Production Property

Prior Law: Prior to the 2025 Act, there were limited opportunities to accelerate the depreciation deduction for nonresidential real property beyond what was available under §168(k) and §179.

New Law:  Under the new legislation, the 2025 Act introduces a new class of property called “qualified production property,” which is eligible for a 100% depreciation allowance if elected.  Qualified production property refers to the portion of nonresidential real property used in “qualified production activities,” such as the manufacturing of tangible personal property, agricultural or chemical production, or refining processes that result in a “substantial transformation” of the materials comprising the final product.  The portions of the building used for functions unrelated to manufacturing, production or refining – such as offices, administrative services, lodging, parking, and sales, research, software development or engineering activities – do not qualify.

This enhanced deduction is not available for property leased to others.  For property under construction, to be eligible, construction must begin after January 19, 2025, and before January 1, 2029, and the property must be placed in service within the United States or its possessions before January 1, 2033.  Additionally, the original use of the property must commence with the taxpayer unless, at the time of acquisition by the taxpayer, such property was not used in a qualified production activity by any person during the period beginning on January 1, 2021, and ending on May 12, 2025.

WG Observation: Real estate and industrial clients with large buildouts should review eligibility for this provision. It’s a narrow window, but qualifying property may dramatically shift depreciation timing and tax deferral strategies. Site selection and construction timing will matter.

4. Research and Development Expenses

Prior Law: Before the TCJA, §174 allowed for the immediate expensing of research and experimental (R&E) expenditures. However, beginning in 2022, the TCJA required taxpayers to capitalize and amortize domestic R&E expenditures over 5 years and foreign R&E expenditures over 15 years.

New Law: The 2025 Act repeals the amortization requirement for domestic R&E costs, restoring a taxpayer’s ability to fully expense these costs under new §174A for tax years beginning after December 31, 2024.  Foreign R&E costs, however, remain subject to the 15-year amortization period.

Software development costs are explicitly included in the definition of research under §174A and may now be immediately deducted. This favorable provision reverses the prior rules that required capitalization of such costs beginning in 2022.

The 2025 Act provides additional transition rules for eligible small businesses, defined as taxpayers with average annual gross receipts of less than $31 million over the prior three years, by offering two options for recovery of previously capitalized domestic R&E:

• Option 1: Elect to apply §174A retroactively to the 2022–2024 tax years by filing amended returns; or
• Option 2: Deduct any remaining unamortized domestic R&E expenditures over a one- or two-year period beginning in 2025.

For taxpayers that do not meet the gross receipts test outlined above, Option 2 is the only available path forward; retroactive application is limited to eligible small businesses.

Additionally, the legislation includes conforming changes to §41 and §280C. To claim the research credit, taxpayers must now treat the underlying qualified research expenses (QREs) as domestic R&E under §174A. Taxpayers must either reduce their §174A deduction or elect a reduced credit under §280C.

WG Observation: For 2024 tax returns, the legacy capitalization rules under TCJA continue to apply.  We are monitoring IRS guidance for further instructions as to how to implement the changes described above.

5. Business Interest Limitation Under §163(j)

Prior Law: As enacted by the TCJA, §163(j) limited the deduction of business interest expense to 30% of adjusted taxable income (ATI).  Through 2021, ATI was calculated similarly to EBITDA with depreciation, amortization, and depletion, increasing the deductibility baseline. However, beginning in 2022, depreciation, amortization, and depletion were excluded from the add-back, shifting to an EBIT-based calculation.

New Law: The 2025 Act restores the EBITDA-based limitation effective for tax years beginning after December 31, 2024.  As a result, ATI once again is calculated before reductions for depreciation, amortization, and depletion, expanding the base for deductibility of business interest expense.

The 2025 Act also imposes two unfavorable changes effective for tax years beginning after December 31, 2025.  First, it amends the definition of ATI by providing that it must be calculated without regard to Subpart F income (§951), GILTI (§951A), §78 gross-ups, and related deductions under §245A and §250.

Additionally, for tax years beginning after December 31, 2025, new ordering rules under §163(j) require that the limitation on deductibility of business interest expense be applied before any other interest capitalization rules.  Under the revised regulations, taxpayers must:

• first calculate the allowable business interest expense deduction under §163(j) without regard to any other provisions requiring capitalization of interest expense;
• then apply the amount allowable after taking into account the limitation first to capitalized interest and second to currently deductible interest.

Notably, interest capitalized under §263A(f) (self-constructed property) or §263(g) (straddles) are excluded from the definition of business interest and not subject to limitation.

WG Observation: Clients with layered debt structures or high capex should review how the new ordering rules affect interest modeling. It may be beneficial to segregate interest types more clearly in internal reporting to manage how the limitation affects capitalized vs. deductible interest.

6. Meals – Employer-Operated Facilities

Prior Law: Under TCJA, expenses for employer-operated eating facilities were set to become fully non-deductible after 2025. This included meals provided for the employer’s convenience under §119(a) and the cost of operating on-premises cafeterias. Starting in 2026, these expenses would have been fully disallowed, regardless of the business purpose.

New Law: The 2025 Act restores deductibility in two key situations:

• Meals provided for the employer’s convenience under §119: These are meals furnished on business premises for substantial noncompensatory business reasons (e.g., emergency staffing, shift work). Under §119, such meals remain excludable from employee income, and the employer may now deduct the related expenses.
• Bona fide business transactions: Deductibility is also allowed when meals or facility access are sold in arm’s-length transactions, such as structured payments in a company cafeteria or meal charges to third parties.

The effective date applies to amounts paid or incurred after December 31, 2025.

WG Observation: Clients should document business reasons for employer-provided meals (especially those under §119) and ensure structured pricing in workplace cafeterias.
This is a good time to revisit cafeteria policies and payroll inclusion practices for de minimis meals.

7. Corporate Charitable Contributions

Prior Law: Historically, corporations have been allowed to deduct charitable contributions up to 10% of taxable income, without any floor requirement.

New Law: The 2025 Act imposes a 1% floor and retains the 10% ceiling on corporate charitable contribution deductions. Excess contributions may be carried forward for up to five years on a first-in, first-out basis, but only to the extent they do not reduce taxable income and increase net operating loss (NOL) carryovers. This change applies to taxable years beginning after December 31, 2025.

WG Observation: The 1% floor means smaller annual donations may no longer be deductible. C corps should consider bunching contributions into high-income years to maximize deductibility and avoid lost tax benefits.

8. Advanced Manufacturing Investment Credit

Prior Law: A 25% investment tax credit was available for qualified investments in advanced manufacturing facilities primarily engaged in semiconductor production or producing semiconductor manufacturing equipment. To qualify, construction of the facility had to begin before December 31, 2026.

New Law: The 2025 Act increases the credit rate to 35% for qualified investments. The enhanced credit applies to property placed in service after December 31, 2025.

WG Observation: This is a significant incentive for clients investing in U.S. semiconductor facilities. For clients considering facility expansion, it’s worth coordinating with cost segregation and federal credit teams early in the construction planning process to ensure full eligibility and documentation.

The 2025 reconciliation bill delivers sweeping updates to the corporate tax landscape, blending the revival of TCJA-era incentives with newly tailored limitations and structural reforms. As additional IRS guidance is released in the coming months, taxpayers should stay proactive to ensure they are optimizing benefits and meeting updated compliance standards under the new law.

Date: 7/23/2025 | Author: Ryan Moore, CPA

In the final episode of the hit TV show Game of Thrones, Peter Dinklage’s character Tyrion Lannister delivered the following profound line, “No one is very happy, which means it’s a good compromise.” A similar sentiment may apply to the recent changes to the state and local tax (SALT) deduction, included in the One Big Beautiful Bill Act, signed into law on July 4th.

We previously reported that several GOP representatives in the House advocated for a higher deduction cap than initially proposed, expressing concern that the $40,000 limit didn’t go far enough to provide relief and even threatening to vote against the legislation unless the cap was raised further. On the other side, the Senate’s version of the bill initially retained the existing $10,000 cap, citing long-term budget impacts and fiscal sustainability as reported here. Ultimately, the enacted legislation represents a blended approach, incorporating elements from both chambers.

The final act does allow for a temporary increased $40,000 SALT deduction cap beginning in 2025 and continuing through 2029, after which it will permanently be reduced back to $10,000.  However, the “additional” deduction cap (above the $10,000 cap already in law) will be phased out for taxpayers with a modified adjusted gross income over certain threshold amounts. See the chart below for a summary of possible scenarios for 2025 filers (NOTE: The threshold and deduction cap amounts will increase by 1% from 2026 through 2029.)

Thus, the $40,000 SALT deduction was allowed for a limited amount of time and to a limited class of taxpayers. For higher-income taxpayers, the SALT cap effectively remains at $10,000, and for all taxpayers, the cap will revert to $10,000 beginning in 2030 unless additional legislation is passed before then.

One notable outcome of the final legislation is the preservation of state pass-through entity (PTE) tax regimes. In short, nearly all states have introduced PTE tax regimes as a workaround for taxpayers owning partnership or S corporations to still be able to deduct their state income taxes allocable to these businesses since the $10,000 SALT cap was introduced in 2017.  The original House bill included language that would have eliminated the efficacy of these PTE tax regimes for businesses in specific industries. However, the final version of the bill out of the Senate, which was signed into law by President Trump, included no such language. Thus, if eligible, taxpayers can continue to utilize PTE tax systems, which have and will continue to reduce the sting of the SALT cap for certain business owners.

As with many areas of tax policy, the final outcome reflects a series of negotiations and trade-offs. While some taxpayers may see meaningful relief, others may find little change. Regardless, these developments underscore the importance of proactive planning. We’ll continue monitoring the details and stand ready to assist you in navigating what’s next.

Date: 7/9/2025 | Author: Lauren Landolfi, CPA, MST

After initially surfacing in Senate amendments to the “One, Big, Beautiful Bill” (OBBB), the proposed expansion of the Qualified Small Business Stock (QSBS) exclusion is now law. This powerful tax incentive allows non-corporate investors to exclude most or all capital gains on stock in certain C corporations. As the federal government signed sweeping reforms into law on July 4, 2025, New Jersey also stepped in with its own QSBS updates. From holding period tweaks to higher exclusion limits and a broadened asset threshold, Section 1202 has been reengineered for a new era of small business investment. Here’s what’s changing and what it means for your portfolio.

Federal Qualified Small Business Stock Exclusion (Effective for Stock Issued After July 4, 2025)

Recent federal changes significantly expand the benefits for QSBS investors:

• Lifetime Exclusion Increased: The per-issuer exclusion jumps from $10 million to $15 million for stock issued after July 4, 2025.
• Inflation Indexing: The $15 million cap will now be indexed for inflation, ensuring its value keeps pace with economic growth.
• Broader Qualification Threshold: The aggregate gross assets test—used to determine small business status—rises from $50 million to $75 million, with an inflation adjustment added.
• Partial Exclusions for Mid-Term Holds:
  • 50% exclusion for stock held 3 years
  • 75% exclusion for stock held 4 years
  • 100% exclusion for stock held 5 years or more (retained from previous law)

These updates make QSBS more accessible to investors and more compatible with the capital-raising needs of high-growth startups, while offering flexible tax advantages for varying investment timelines.

New Jersey Qualified Small Business Stock Exclusion (Effective in 2026)

New Jersey’s Assembly Bill No. 4455 introduces a long-awaited state-level QSBS tax break. After fully adopting IRC Section 1202, New Jersey’s law now aligns state tax treatment with Federal policy and will be effective for tax years beginning in 2026. In addition to aligning with federal regulations, New Jersey has adopted policies similar to those of neighboring states, which may provide local startups with additional advantages.

Closing Thoughts

Together, the federal and New Jersey QSBS updates represent a bold step toward fostering innovation and entrepreneurship. Investors now enjoy stronger incentives to support emerging businesses. While the federal changes expand eligibility and flexibility nationwide, New Jersey’s new law removes a longstanding barrier to tax-efficient investing at the state level.

Overall, these reforms offer a clearer, more rewarding path to building and scaling the next generation of emerging business success stories for founders, employees, and early-stage backers alike. As always, careful tax planning and compliance will be essential to maximizing the benefits of this evolving landscape.

If you have any questions or require further information, please don’t hesitate to contact your WG advisor.

Date: 7/7/2025 | Author: Lauren Landolfi, CPA, MST

On July 4, 2025, President Donald Trump signed the “One, Big, Beautiful Bill” into law. This sweeping package is poised to reshape the tax landscape for individuals and businesses alike. This legislation includes long-term changes directly affecting tax planning, deductions, and compliance strategies, particularly for high-net-worth individuals, business owners, multistate entities, and foreign-related entities.

We are diligently reviewing the final language of the bill to understand its full implications for our clients. In the coming days and weeks, we will continue to provide updates, practical insights, and planning considerations as we learn more.

Date: 6/18/2025 |  Author: Ryan Moore, CPA, CVA

Last month, we reported that the House version of the “One Big, Beautiful Bill” included a $30,000 increase to the cap on the deduction for state and local taxes (SALT) for individual taxpayers ($10,000 – $40,000). The $40,000 deduction is subject to a phaseout but cannot be less than $10,000. House GOP lawmakers fought hard for even higher state tax deductibility but settled for the $40,000. Those same GOP lawmakers may be disappointed by the version currently taking shape in the Senate. 

On Monday, June 16th, the Senate released the first draft language of the tax provisions in its version of the “One Big, Beautiful Bill.” Though the Senate version of the bill intentionally mirrors many of the House provisions, there was one notable departure: the Senate version includes NO increase to the SALT deduction cap. The Senate’s current draft of the bill maintains the $10,000 SALT deduction cap. 

It is worth noting that the Senate identified the $10,000 SALT deduction cap as a “placeholder” and expects further negotiations on this amount. While several GOP Senators support lowering the House’s proposed $40,000 SALT cap, many GOP Representatives have warned they’ll oppose the bill if the cap is reduced. This politically sensitive issue is far from resolved. 

As always, we will continue to monitor progress on the legislation and keep you informed of important updates. Should you have any questions or concerns, please contact your WG tax advisors for more information.

Date: 5/27/25 | Author: Jenna McDonough

Some major tax changes could be coming—if the Senate signs off. The House has passed a bill introducing several new deductions aimed at workers, seniors, and car buyers. Here’s a quick overview of what’s in the proposal:

Tip Deduction

Starting in 2025, tipped workers may qualify for a new deduction, though tips will still count as taxable income; this would allow a deduction for the amount reported as tips.

• Applies to voluntary cash tips in industries where tipping is customary, like restaurants, salons, or spas.
• Not available to high earners (over $160,000 in 2025) or those in professional services (e.g., law, finance).
• Must have a valid Social Security number.
• Individuals will not need to itemize to claim the deduction.

Bonus for Employers: The FICA tip credit would expand beyond the food and beverage industry to include businesses in the beauty service industry.

Overtime Pay Deduction

• Employees earning overtime (excluding tips) may be eligible for a deduction from 2025–2028. As with tips, income limits, and other eligibility rules would apply.
• Individuals will not need to itemize to claim the deduction.

Extra Deduction for Seniors

Taxpayers 65 and older could deduct an additional $4,000:

• Income Limitation – phases out at $75,000 (single) / $150,000 (joint).
• Must have a valid Social Security number.

This proposal is seen as a creative workaround to lower taxes on Social Security income – something that’s been politically challenging to do directly.

Auto Loan Interest Deduction

Car buyers could deduct up to $10,000 in auto loan interest, but:

• The vehicle must be assembled in the U.S.
• Does not apply loans to purchase business-use vehicles.
• Income Limitation – phases out at $100,000 (single) / $200,000 (joint).
• Individuals will not need to itemize to claim the deduction.

What’s next? The Senate still needs to weigh in, so these aren’t law yet—but change is on the horizon. We’re watching closely and will keep you updated.

We’ll share more details on the bill’s contents in the coming days. Stay tuned for updates.

Date: 5/22/25 | Author: Bill McDevitt, CPA

Earlier today, the House passed the bill by a single vote. The legislation now moves to the Senate, where lawmakers will draft and vote on their own version.

If the Senate passes a revised version, both chambers will meet in conference to reconcile the differences between the versions and create a final blended bill. That blended version will then return to the House and Senate for a straight up-or-down vote, with no further changes allowed.

We’ll share more details on the bill’s contents in the coming days. Stay tuned for updates.

Date: 5/19/25 | Author: Darko Naumoski, CPA

As the legislative process is in the early stages of development and changes are sure to follow, below we outline the major international provisions of the new “One Big, Beautiful Bill” as proposed by the House Ways and Means Committee.

• GILTI (Global Intangible Low-Taxed Income): 49.2% GILTI deduction made permanent (Effective rate of 13.335% after 80% limit on foreign tax credits).
  • New law excludes certain Virgin Island services income from “tested income” and GILTI.
• FDII (Foreign-Derived Intangible Income): 36.5% FDII deduction made permanent (Effective rate of 13.335%).
• BEAT (Base Erosion and Anti-Abuse Tax): 10.1% BEAT rate made permanent (11% for banks/dealers).
• New Section 899 – Remedies against “Unfair Foreign Taxes”
  • Increased tax rates on certain foreign companies and individuals who are residents in a country with an “unfair foreign tax” (up to 20%).
  • Modified BEAT rules for US corporations majority-owned by foreign persons in a country with an “unfair foreign tax”.
• Disallowed Foreign Real Property Taxes: The law essentially disallows the deduction of foreign real property taxes except when accrued, incurred, or paid by an active trade or business in the course of its business operations.
  • It does not include foreign income, war profits, and excess profits taxes
• Excise tax of 3.5% on remittances sent to foreign transferees unless the transferor is a US citizen.  Remittance excise tax is treated as a refundable credit on the transferor’s US personal tax return.

We will continue to monitor the legislation surrounding the international provisions and provide updates as more details emerge.

*Note: The information in this post has been updated as of June 19th. The proposed law reflects the House-passed version of the bill dated May 22, 2025.

Date: 5/16/2025 | Author: Bridget Uribe, CPA

Among the handful of provisions in the House draft legislative package, called “The One, Big, Beautiful Bill,” is a long-awaited change to the treatment of research and experimental (R&E) expenditures under Section 174. The proposal would repeal the amortization requirement introduced by the Tax Cuts and Jobs Act (TCJA) and restore the ability for businesses to immediately expense domestic research and development (R&D) costs, reverting to the rules in place before 2022.

Under the TCJA, starting in tax year 2022, businesses have been required to capitalize and amortize domestic R&E costs over five years (fifteen years for foreign research), a significant departure from the longstanding rule of fully expensing R&D costs under Section 174.

The proposal would:

• Allow full expensing of domestic Section 174 R&E costs for tax years beginning after December 31, 2024, and before January 1, 2030
• Foreign R&D expenses are unchanged and must continue to be capitalized over a 15-year period

Notably absent from the bill is any guidance on whether taxpayers will be able to expense costs that have been already capitalized under the current rules for the tax years 2022-2024.

The proposal has been well received by industry groups and tax professionals, but its fate in the Senate remains uncertain.

We are closely monitoring this legislation and will continue to provide updates as more details emerge.

Date: 5/15/2025 | Author: Ryan Moore, CPA

As part of the House’s initial draft of the legislative package known as “The One, Big, Beautiful Bill,” lawmakers have proposed increasing the federal cap on the state and local tax (SALT) deduction from $10,000 to $30,000. For taxpayers filing jointly and earning over $400,000, the higher cap would be gradually reduced, but it would not drop below the current $10,000 limit.

The SALT deduction cap, originally implemented under the Tax Cuts and Jobs Act (TCJA) of 2017, has remained a point of contention, especially in high-tax states such as New York, New Jersey, and California. Under the TCJA, for the first time in U.S. tax history, a hard cap of $10,000 was imposed on the deduction for state and local income, sales, and property taxes. Many taxpayers in high-tax states exceed this threshold early in the year, making the limitation particularly impactful.

While the proposed increase represents a potential relief for some taxpayers, it has drawn criticism from lawmakers on both sides. A group of Republican representatives from high-tax states have argued that the $30,000 cap does not go far enough and have signaled they may withhold support for the bill unless the cap is raised further. With at least five House Republicans expressing opposition, the SALT provision may pose a significant hurdle to the bill’s advancement, particularly given the narrow GOP majority in the House.

We are closely monitoring this legislation and will continue to provide updates as more details emerge.

Date: 5/13/2025 | Author: Stephanie Holston, CPA

House Republicans have revealed the tax portion of the “Big, Beautiful Bill”, as promised.

Much of the bill is an extension of the Tax Cuts and Jobs Act of 2017.

The bill proposes to make the TCJA tax rate cuts permanent.

It also extends and enhances the 199A deduction.

The bill also includes President Trump’s promise to reduce the tax on overtime, retirement income, and tips. These are all capped and subject to phase-out.

The SALT cap still stands, although the $10,000 cap is raised to $15,000 for individuals and $30,000 for married filing jointly (MFJ).

The bill is scheduled for markup today. It remains to be seen what changes will be made in the House before it moves to the Senate.

Stay tuned for more updates and a deeper dive into the bill’s contents.

Date: 4/30/2025 | Author: Bill McDevitt, CPA

In a surprising announcement yesterday, Treasury Secretary Scott Bessent called full expensing “one of the most powerful parts of President Trump’s 2017 tax bill” and revealed plans to make it retroactive to January 20th. But that’s not all—it’s expanding.

“We’re also looking to add full expensing for factories,” Bessent said. “So bring your factory back. You can fully expense the equipment and the building.”

The takeaway? This proposal appears to be narrowly focused on incentivizing businesses to reshore manufacturing operations. Whether it becomes law—and under what conditions—remains to be seen, but the potential tax benefit is significant.

Date: 4/24/2025 | Author: Bill McDevitt, CPA

House Republicans are planning to bring Tax Legislation to the floor during the week of May 19, which is the final week the House is in session before the Memorial Day recess.

This timeline makes it unlikely that the Tax Legislation will reach the President’s desk before Memorial Day—a target date that few considered realistic to begin with. It remains to be seen whether the package will be ready for a  floor vote by the week of May 19, as significant work remains. Drafting the legislative language is only part of the challenge; reaching consensus on what to include and exclude is often more difficult.

The working title of the Republican reconciliation package is the “Renewing the American Dream Act.” It is yet to be determined whether President Trump will accept this title or its acronym, RADA.

Date: 4/4/2025 | Author: Bill McDevitt, CPA

This week, Senate Republicans unveiled a new version of the budget reconciliation bill. Key points include:

• $3 Billion in immediate spending cuts, with an expected total of $1.5-$2 Trillion in cuts.
• Tax cuts potentially totaling up to $5.2 Trillion.
• A $5 Trillion increase in the debt ceiling.

The Senate sets a $1.5 Trillion cap on tax cuts. Republicans plan to use the “current policy baseline” tactic to suggest that extending Trump’s 2017 tax cuts will cost nothing.

The GOP aims for the $5 Trillion debt ceiling increase to last until after the 2026 midterms.

The House and Senate must adopt identical budget resolutions before they can draft and pass the whole law. The Senate hopes to pass the modified bill this weekend, to have the House adopt it before their two-week Easter recess.

Speaker Mike Johnson aims to get the package to President Trump’s desk by Memorial Day, though some GOP senators believe it will take longer.

Time will tell—stay tuned!

Date: 3/12/2025 | Author: Bill McDevitt, CPA

Speaker Johnson said today that he plans to get a vote in the House on the so-called “Big Beautiful Bill” by Easter, April 20, 2025.

He hopes that the bill can be passed by the Senate and signed into law by Memorial Day, May 26, 2025.

This is very ambitious timing, but given the speed at which things are happening in Washington now, it may be possible.

Time will tell…

Date: 3/5/2025 | Author: Stephanie Holston, CPA

The budget advanced by the House contains approval for $4.5 trillion in tax cuts. However, the Trump administration has an ambitious agenda regarding tax policy, which quickly adds up to more than what’s been approved.

The estimated costs of some of the proposals are:

• Extension of the TCJA provisions – $4 trillion
• Removal of the SALT deduction cap – $200 billion
• Exemption of tips from income – $100 billion
• Exemption of overtime from income – $300 billion
• Exemption of all social security payments from income – $600 billion

The total of the above comes to $5.2 trillion—and these are just some of the proposals. Now begins the negotiations, so it remains to be seen what will be in and what will be out.

In addition to that tug of war, how these tax cuts are scored also matters. We will continue to keep you informed as the budget moves through Congress.

Date: 2/27/2025 | Author: Bill McDevitt, CPA

Last week, the House and the Senate each passed a budget bill that contains a budget resolution framework.

The bills were passed on a partisan line, with razor-thin margins.

The Senate approach is a small bill that does not address changes to tax law; they intend to address tax changes in the second bill later this year.

The approach in the House is much more comprehensive. The so-called “One Big Beautiful Bill” addresses many subjects, including tax reform.

The President prefers the “One Big Beautiful Bill” path.

So, what happens now?

At some point, the two chambers will need to agree on a single framework; let the arm-twisting and “Horse Trading” commence.

Author: Bill McDevitt, CPA

Trump met with House GOP leadership yesterday. The stated goal of the House is to outline the main points of the bill by the end of the day today. Hold hearings next week and pass the legislation in April. Ambitious goals… Senate leadership is meeting with the President at Mar-a-Lago today. The Senate has stated that they first want to pass legislation to fund Trump’s deportation plan and complete the border wall. The Senate plans to take up tax legislation later this year.

Bill McDevitt

CPA, CVA