Tax Relief for New Businesses Act

Summary

Treats start-up and organizational expenditures as a single category for deduction and amortization, raises the immediate-expensing threshold to $50,000 (text contains a likely typo noted in the bill), and eliminates the old separate code for organization expenditures. It also creates special net operating loss (NOL) rules that separate start-up/organizational NOLs from other NOLs, requires an irrevocable election to use those rules, extends entity-level application to partnerships and S corporations, and makes the changes effective for taxable years beginning after December 31, 2025.

• Start-up and organizational expenditures are treated together for deduction and amortization.
• Immediate-expensing threshold is raised to $50,000 with a $50,000 phaseout (bill text notes a likely typo).
• The separate statutory provision for organization expenditures is repealed and related cross-references are updated.
• Partnerships and S corporations are explicitly covered at the entity level.
• New special NOL rules create a separate NOL category for start-up/organizational losses and impose an irrevocable election to use them.
• Taxpayers must track separate NOL buckets and follow Treasury/IRS rules for the required election.
• Changes apply to taxable years beginning after December 31, 2025.
• Likely increases near-term tax deductions for new businesses, with administrative and compliance impacts for tax preparers and the IRS.