Sponsors (4)
The bill keeps a tax expensing incentive for environmental cleanup before 2025 and after 2028—supporting remediation and lowering taxes in those periods—but creates a 2025–2028 gap that raises tax bills, reduces business cash flow, and may delay cleanup projects during that interval.
Taxpayers (including small-business owners) who pay qualified environmental remediation costs before 2025 or after 2028 can immediately expense those costs, lowering taxable income and reducing tax bills in those years.
Homeowners and rural communities remain eligible for a tax-based incentive for remediation work done before 2025 or after 2028, which supports continued environmental cleanup activity in those periods.
Taxpayers (including small-business owners) who incur qualified remediation costs in 2025–2028 cannot immediately expense them under §198, increasing their taxable income and raising tax bills for those years.
Businesses that face higher taxable income in 2025–2028 will have reduced after-tax cash flow during those years, which could constrain investment or hiring decisions.
Homeowners and rural communities may see delayed or deterred environmental cleanup projects during 2025–2028 because the temporary removal of the expensing incentive reduces the financial motivation to undertake remediation.
Based on analysis of 2 sections of legislative text.
Pauses the section 198 immediate expensing option for brownfield remediation for 2025–2028 and then resumes it for costs incurred after Dec 31, 2028.
Official title: To amend the Internal Revenue Code of 1986 to extend expensing of environmental remediation costs.
Introduced January 28, 2025 by Mikie Sherrill · Last progress January 28, 2025
Changes the tax expensing window for qualified environmental remediation (brownfields) costs so that the ability to elect immediate expensing pauses for expenditures in 2025–2028 and then resumes for expenditures incurred after December 31, 2028. The amendment takes effect for expenditures paid or incurred after December 31, 2024, and creates a multi-year gap during which remediation costs would not be eligible for expensing under section 198 of the Internal Revenue Code.