The new law makes permanent enhanced business loan interest and depreciation rules. The Senate version, which was enacted into law, changed the House version of the bill that enhanced interest deductibility and depreciation rules for only five years.

Both the House and Senate versions of the budget reconciliation bill included a depreciation provision that allows a 100 percent deduction (rather than partial annual deductions over the useful life of the property to reflect amortization of the cost of the property) for qualified property acquired and placed in service by a business on or after January 19, 2025. However, the House bill provision would have expired after five years while the Senate version, which was enacted into law, makes the rule permanent.

On the business loan interest deduction, the new law makes permanent the rule that allows calculation of adjusted gross income (AGI) without regard to deductions allowed for depreciation, amortization, depletion, interest, and taxes (EBIDTA).

Prospects: Business interests are applauding the permanent extension of these two rules. It appears unlikely that they will change any time soon.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.