On January 3, Rep. Andy Biggs (R-AZ) introduced legislation that would repeal the limits on the kinds of businesses that are eligible for the section 199A deduction for qualifying noncorporate business income. The bill would also repeal the estate tax while retaining the step up in basis for assets passing to heirs after the decedent’s death.

Bipartisan legislation to allow 403(b) retirement savings plans to invest in collective investment trusts (CITs) has been introduced in both the House and Senate. The legislation would amend securities laws to allow for 403(b) CIT investments. Retirement law was amended to allow these CIT investments in SECURE 2.0, but efforts to expand the CIT investment authority to include securities laws fell short at the time.

A bipartisan Senate bill, the “Charitable Act,” would reestablish an above-the-line charitable deduction. The deduction would allow taxpayers who do not itemize to deduct their charitable contributions up to an amount equal to up to one third of the standard deduction.

On January 10, the Treasury Department released new guidance on SECURE 2.0 automatic enrollment and catch-up contribution rules. The automatic enrollment guidance is in REG-100669-24. The catch-up contribution proposed regulation is REG 1545-BR11.

On January 22, the Internal Revenue Service (IRS) issued guidance on how employers should deal with the tax requirements of contributions and benefits paid under state paid and family leave programs. The guidance comes in Rev.Rul. 2025-4.

On January 27, the Senate voted to confirm the nomination of Scott Bessent as the 79^th Secretary of the Treasury. The vote was 68 to 29. Sixteen Democrats joined with the Republicans to approve the nomination.

On February 13, President Trump’s nominee to be Secretary of the Department of Health and Human Services (HHS), Robert F. Kennedy Jr., won approval from the Senate following approval by the Senate Finance Committee on a party-line 14 to 13 vote.

The last big-ticket item approved by the 118^th Congress was enactment of a continuing resolution (CR), HR 10545, that keeps the government funded through March 14, 2025. The House and Senate approved the measure by wide margins. The House vote was 366 to 34, with one member voting “present.” The 366 aye votes included 170 Republicans and all Democrats except the one (Rep. Jasmine Crockett of Texas) who voted present. The Senate vote, coming just minutes after midnight December 20 deadline, was 85 to 11. President Biden signed it into law on December 21. Thus, the threatened partial government shutdown was averted, despite a few hours on a Saturday during which funding for the government technically ran out.

On December 23, 2024, President Biden signed into law two pieces of legislation that will ease the burden on employers and insurance carriers that need to submit information to the IRS and employees on health care coverage. The Paperwork Burden Reduction Act (H.R. 3797) and the Employer Reporting Improvement Act (H.R. 3801) were championed by a bipartisan group of legislators eager to provide significant relief from paperwork burdens for small businesses.

After a series of court decisions and reversal and then a reversal of the reversal, the rule (Beneficial Ownership Information, or BOI rule) requiring most businesses to report to FinCEN (the Financial Crimes Enforcement Network) on their ownership is currently on hold, pending a judicial opinion on whether the law containing the BOI rule is constitutional.

The 119^th Congress convened January 3. The GOP controls the House and the Senate, and Republican President-Elect Trump will be in the White House as of January 20. Republicans are still squabbling a bit about which priority issue to tackle first, but whatever the order, a massive tax bill, Fiscal Year (FY) 2025 government funding, FY 2026 appropriations to fund the government, the statutory debt limit, and nomination confirmations will dominate early in 2025. On the regulatory front, once cabinet secretaries (and other key agency leaders) are confirmed, expect action to roll back Democratic rulemaking in many issue areas.

With only a little bit of drama, on January 3, House Republicans chose Rep. Michael Johnson (R-LA) to be Speaker of the House for the 119^th Congress. Virtually all Speaker votes are purely partisan, and this one was no exception. So, with a 219 to 215 GOP-to-Democrat edge, Rep. Johnson needed 218 votes to become Speaker. The final vote was 218 to 215—one Republican (Kentucky’s Rep. Thomas Massie) voted for someone else.

The hard-right wing of the Republican party in the House has written a letter to Speaker Johnson (R-LA) listing their demands for their support of early legislative initiatives this year. They include legislation to expand health savings accounts (HSAs), and “real” spending cuts “in place” ahead of approving a debt limit increase.

Just as the 118^th Congress ended last month, then Senate Finance Committee chairman and now ranking member Sen. Ron Wyden (D-OR) offered a bill to contain private placement life insurance (PPLI). The bill died when the 118^th Congress adjourned sine die on January 3, but Sen. Wyden is expected to reintroduce his legislation early this year.

Last month the Internal Revenue Service (IRS) announced an extension, to January 1, 2026, for rules to accommodate the SECURE 2.0 required minimum distribution (RMD) rules. The December 18 announcement came in IRA Announcement 2025-2.

The Department of Labor (DOL) has appealed the November Eastern District of Texas district court ruling that overturned the agency’s updated white-collar exemption to the Fair Labor Standards Act’s (FLSA’s) overtime (OT) rules. However, the Trump Administration could reverse the decision to appeal to the Fifth Circuit Court of Appeals.

Both Republicans and Democrats have named the members joining the House Ways & Means and Senate Finance Committees for the 119^th Congress. These lawmakers will have particular influence over what goes in and what stays out of the massive tax bill Congress intends to enact this year.

Republicans in both the House and Senate are talking about expanding health savings accounts (HSAs) and association health plans (AHPs). There is a growing sense that these policies will help grow health coverage and reduce health insurance costs. Interest in HSAs and AHPs appear to be the emerging Republican answer to the Affordable Care Act (ACA).

The Joint Committee on Tax’s (JCT’s) most recent “tax expenditure list” includes trillions in foregone federal revenue as a result of the tax rules governing retirement savings, life insurance death benefits and cash values, and employer provided health insurance.

The outgoing 118^th Congress must fund U.S. discretionary spending by December 20. Issues in play in that effort include extension of authority and funding for the National Flood Insurance Program (NFIP), delay of the Corporate Transparency Act’s (ACT’s) Beneficial Ownership Information (BOI) rule, and possibly technical corrections to SECURE retirement savings law.