Budget & Taxes (Tax Credits)

The CIRCUIT Act (S 448) expands a federal tax credit for advanced manufacturing to include distribution transformers, which are critical components in electrical power distribution systems. It provides a 10% tax credit for the production costs of these transformers, directly benefiting manufacturers that produce them. The bill defines "distribution transformer" using an existing term from the Energy Policy and Conservation Act and sets the credit to apply to transformers produced and sold 90 days after enactment. This policy change creates a new financial incentive for companies manufacturing these essential electrical infrastructure components.

This bill, the HONOR Act (S 327), denies U.S. taxpayers a foreign tax credit for taxes paid to the Russian Federation during a specific period. It amends the tax code to block the credit for Russian taxes paid from 30 days after the bill's enactment until normal U.S. trade relations with Russia resume. The key provision directly affects U.S. individuals and businesses that pay taxes to Russia, preventing them from reducing their U.S. tax liability with those Russian payments. The rule takes effect 30 days after enactment, with a 90-day delay for the deduction limitation. The bill explicitly states it applies without regard to U.S. trade treaties with Russia.

This bill amends the tax code to allow taxpayers to claim the child tax credit for stillborn children carried for 20 weeks or more. It directly affects parents who experience stillbirths after 20 weeks of pregnancy by treating the unborn child as a "qualifying child" for tax credit purposes, as if the child had been born alive. Key provisions adjust existing tax rules to exclude the stillborn child from standard eligibility restrictions (like requiring a social security number) if the child would have qualified had it been born. The change applies to tax returns filed for years after the bill becomes law.

The Working Waterfronts Act of 2025 provides financial support to coastal communities and industries through multiple programs. It creates a tax credit for hydroelectric facilities that improve fish passage and water quality, offers Department of Agriculture loans and grants for fishing and mariculture businesses, and establishes grants to support rural seafood processing infrastructure. The bill also includes a working waterfronts preservation grant program to protect areas used by commercial fishing, mariculture, and boatbuilding industries, and creates a maritime workforce grant program to support training and education. These provisions directly affect commercial fishing businesses, seafood processors, coastal communities, and maritime workers.

This bill increases the annual limit on the tax credit for qualified railroad track maintenance expenses (also referred to as the short line railroad tax credit) and expands eligibility for claiming the credit. Under current law, the tax credit is limited each tax year to $3,500 multiplied by the sum of the number of miles of railroad track owned or leased by the taxpayer (miles owned or leased) and the number of railroad track miles assigned to the taxpayer by a Class II or III railroad (miles assigned). This bill increases the annual limit to $6,100 multiplied by the sum of miles owned or leased and miles assigned. The $6,100 amount used in the calculation of the tax credit limit is adjusted for inflation for tax years beginning after 2025. The bill also expands eligibility for the tax credit to include gross expenses for maintaining railroad tracks owned or leased as of January 1, 2024. Under current law, the tax credit is limited to gross expenses for maintaining railroad tracks owned or leased as of January 1, 2015.

Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2025 This bill establishes a new investment tax credit in the amount of 30% of the basis of any hydropower improvement property. The bill defines hydropower improvement property as property that adds or improves fish passage at a qualified dam; maintains or improves the quality of the water retained or released by a qualified dam; promotes downstream sediment transport and habitat maintenance; upgrades, repairs, or reconstructs a qualified dam to meet safety and security standards; improves public uses of, and access to, public waterways impacted by a qualified dam; removes an obsolete river obstruction; or places into service an approved remote dam. Further, written approval for hydropower improvement property must be obtained from the Federal Energy Regulatory Commission or state or local officials prior to January 1, 2035. The bill also allows an election to claim the investment tax credit for qualified progress expenses for some types of hydropower improvement property in advance of such property being placed into service. Any investment tax credit amount claimed for qualified progress expenses reduces the amount of the investment tax credit that may be claimed once the hydropower improvement property is placed into service.  The bill authorizes certain entities, including tax-exempt and governmental entities, to treat the investment tax credit for hydropower improvement property as a payment of tax and receive a refund of any overpayment (also known as elective pay).  Finally, the investment tax credit for hydropower improvement property may be transferred (i.e., sold).

This bill creates a tax incentive program to increase ownership of broadcast stations by women and minorities (defined as "socially disadvantaged individuals"). It establishes an FCC certificate program for qualifying sales of broadcast stations that result in ownership by these groups, requiring at least 50% ownership and 2-year minimum holding period. The bill provides tax benefits including nonrecognition of gain or loss for qualifying transactions and a tax credit for contributions to organizations training socially disadvantaged individuals in broadcast management. The FCC must report to Congress biennially on progress toward increasing diversity in broadcast ownership, based on data collected through Form 323.

This bill extends tax filing and payment deadlines for individuals and businesses affected by federally declared disasters, such as hurricanes or wildfires. It modifies the tax code to automatically treat disaster-related delays as extensions for both filing tax returns and making payments, preventing penalties during declared emergencies. Key provisions include amending IRS rules to apply these extensions to tax credit claims and collection notices issued after the bill's enactment. The law directly benefits taxpayers in disaster-impacted areas by providing relief during recovery periods.

The SEMI Investment Act expands a federal tax credit for businesses investing in semiconductor manufacturing facilities. It defines qualifying facilities as those primarily producing semiconductors, semiconductor equipment, or semiconductor materials - including both direct materials (like silicon substrates physically incorporated into chips) and indirect materials (such as chemicals and equipment used in manufacturing but not in the final product). The bill requires the Treasury Department, in consultation with Commerce, to publish a list of qualifying materials within 180 days of enactment and allows companies to petition for material inclusions not on the list. This credit applies to property placed in service after the bill's enactment, aiming to incentivize domestic semiconductor supply chain investment.

This bill creates a tax credit for businesses that capture and store carbon from forest residues used in wildfire hazard reduction activities. The credit provides $36 per metric ton for carbon stored in secure geological storage and $12 per metric ton for carbon stored through long-duration utilization. To qualify, businesses must meet sustainability standards for sourcing forest residues (from thinning trees no greater than 8 inches in diameter) and undergo verification through lifecycle analysis and monitoring. The credit is designed to incentivize carbon removal while promoting sustainable forest management practices. It will apply to taxable years beginning after December 31, 2025.