Aviation Benefits Included in New Tax Proposal

The bipartisan, bicameral bill could help lower depreciation and interest costs.

John Gallagher

Friday, January 19, 2024 at 05:42 PM ET

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The tax bill with aviation benefits is considered a foundation for big changes expected in 2025. [John Gallagher]

Key Takeaways:

The proposed "Tax Relief for American Families and Workers Act of 2024" offers a three-year framework to restore key business tax deductions with bipartisan support.
For aircraft buyers, a primary benefit is the extension of 100% bonus depreciation until 2026, allowing the full cost of an aircraft to be deducted in the first year, providing immediate financial relief and inflation protection.
The framework also includes more generous deductions for interest expenses, which reduces borrowing costs for capital investments.
These provisions are designed to boost the general and business aviation market and have passed a key House committee, though final enactment is still pending.

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A three-year tax framework unveiled this week in both chambers of Congress includes lucrative provisions that could help boost profits and lower operational costs for aircraft buyers.

The proposal, the Tax Relief for American Families and Workers Act of 2024, has bipartisan support. In exchange for Democrat-backed language to bolster the Child Tax Credit, it restores tax deductions—supported by Republicans—that were eliminated in the 2017 Tax Cuts and Jobs Act, the signature tax package passed under the Donald Trump administration, to help balance revenue lost as a result of cutting the U.S. corporate tax rate from 35 percent to 21 percent.