LIFT Act

The LIFT Act creates a new tax incentive for states and municipalities by allowing them to receive a direct credit from the federal government on interest payments made for specific infrastructure bonds. To qualify for this credit, the bonds must be used entirely for capital projects or maintenance, and the interest would normally be tax-exempt, with the credit amount varying by the bond's maturity date. The legislation also clarifies rules for refinancing these bonds and adjusts tax limits for financial institutions that issue certain types of tax-exempt debt. These changes are designed to lower the cost of borrowing for local infrastructure projects while maintaining strict guidelines on how the funds can be used.