September 29, 2022

Build Back Better tax changes are coming … but when?

“Get your facts first, then you can distort them as you please.”
— Mark Twain

Here’s the most frequently asked question I’ve received in the last year: “Ed, what are the effective dates of the provisions in the big tax bill?” If you’re a CPA and you want to do some planning for clients, it’s a critical question. But maybe not the first question. The first question should be: “When will the big tax bill be enacted?” Or even: “Will the big tax bill be enacted?” As Mark Twain suggests, let’s get the facts first and, well, then you can decide.

Two somewhat related bills moved through Congress this year:

  1. The Infrastructure Investment and Jobs Act (H.R. 3684) was signed into law by President Biden on Nov. 15, 2021. Also known as the Bipartisan Infrastructure Framework, or BIF, this legislation contains traditional infrastructure provisions related to bridges, roads and broadband. There are very few tax provisions in the act; a notable exception is the early Sept. 30 sunset of the Employee Retention Credit (ERC). The AICPA® told Congress about our concerns with the confusion the early sunset created.
  2. The House passed the Build Back Better Act (H.R. 5376) and sent it to the Senate for consideration on Nov. 18, 2021. Also known as BBB, or the reconciliation bill (a Congressional parliamentary procedure set up to expedite the passage of certain budgetary legislation in the Senate), this legislation contains non-traditional social, environmental and educational infrastructure provisions. There are also many tax provisions in this bill, and it is these that interest CPAs the most. The AICPA has submitted numerous letters regarding this legislation and continues to advocate for the profession behind the scenes. Also, my colleagues Eileen Sherr and Lauren Vahey wrote a recent blog that is a good reference point.

The BBB has gone through quite a metamorphosis. It started at 2,466 pages, was cut by the Rules Committee to 1,684 pages and the final iteration was back up close to 2,200 pages. More importantly, though, is what is “out” and “in” the legislation, including:


  • Corporate income tax rate increase
  • Individual ordinary income tax rate increase
  • Capital gains and dividends rate increases
  • QBI (IRC section 199A) changes
  • Grantor trust changes
  • Early sunset of the increased estate tax unified credit


  • Corporate AMT based on book income
  • Revised SALT cap
  • Expanded NIIT for individuals, estates, and trusts
  • Surcharge on high-income individuals, estates and trusts

So, where does this bill stand in the Senate? I have been predicting for some time that the Senate would pass BBB and it would be signed into law just before Christmas. Notwithstanding Senate Majority Leader Schumer’s plans for the rest of the year, I think actual BBB passage gets pushed to the beginning of 2022. There may not be enough floor time to take care of everything before the holiday recess, and there has been a lot:

  • Congress narrowly avoided a government shutdown on Dec. 2 after passing a temporary spending bill — a continuing resolution or CR. That means government agencies will run until Feb. 18, when we’re likely to see another showdown over a larger funding bill. The AICPA will closely watch that development and its potential impact on tax filing season.
  • The National Defense Authorization Act, the annual must-pass legislation that sets the policy agenda and authorizes funding for the Department of Defense, is set for continued consideration and possible passage.
  • Congress also must spend time solidifying plans on the debt limit, where an agreement seems to be shaping up to move the debt limit beyond the 2022 mid-term elections.

All of this must happen before finalizing consideration of the Senate’s version of BBB, which almost assuredly will change from the House version. Some of the BBB’s social and environmental safety net provisions may be pared back. But a few of the tax provisions may change as well. High up on the target list may be:

  • The corporate AMT has received push back from organizations beyond just the AICPA.
  • The AMT is the highest revenue raiser in the package. If AMT goes by the wayside, that revenue would have to be made up and I believe a raise in the corporate rate is still a possibility.
  • Another possible revenue raiser is providing the IRS with the authority to regulate paid income tax return preparers; an area in which the AICPA has heavily advocated on behalf of the profession..

On December 11, Senate Finance Committee Chair Ron Wyden released an “update” to the section of the Build Back Better Act (H.R. 5376) that falls under his committee’s jurisdiction. This version will likely change as negotiations will continue until the last moment as Senate Majority Leader Schumer can bring the assembled reconciliation bill with any last-minute changes to the floor as a substitute amendment.

As I said, I believe a reconciliation package — BBB — will be enacted and most likely sometime in January if, as it appears, the Senate floor time runs out before the holiday recess. We know our members have been through two very tough years; heading into what will likely be another challenging tax busy season, the last thing you want to hear about is a very large tax bill. As Mark Twain also said, “denial ain’t just a river in Egypt.” Seriously though, with a bill likely to move to enactment, the AICPA has been busy planning opportunities to help keep you informed. Look at our Build Back Better hub, where we have collated relevant guidance, resources and learning opportunities — and will continue to add new materials as tax law changes unfold. And that’s where you’ll learn about effective dates.

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