New Bill Would Reduce Taxes On S-Corporations

U.S. Rep. Brad Wenstrup (R-Ohio), a member of the House Ways and Means Committee, which is the lower chamber of Congress’ tax-writing committee, has introduced legislation that would reduce taxes on S Corporations.

As the S Corp Association explained, H.R. 8614, the S Corporation Modernization Act of 2024, would simplify the rules for Main Street businesses, helping them to be more competitive and, if owned by a family, remain in the family’s hands. Specifically, the bill would advance a list technical tax provisions important to the United States’ five million S corporations, including:

• Increasing access to capital;
• Expanding the list of eligible shareholders to include more employees, non-resident aliens, and retirement accounts; and
• Eliminating rules that penalize S corporations compared to partnerships and other business forms.

As the S Corp Association noted, today S corporations are the most common form of business structure in the United States, but the rules governing them often restrict owners’ ability to invest in their businesses and create jobs.

“S Corporations are the backbone of American business, located in every city and town across America … As Congress works to build upon the success of the Tax Cuts and Jobs Act, it’s critical that S Corps aren’t forgotten,” Rep. Westrup said. “The S Corporation Modernization Act contains important changes to the tax code that will make it easier for S Corps to operate and access capital so that they can grow, employ more Americans, and continue to invest in the communities in which they operate.”