President Biden’s Build Back Better bill, the latest proposal in what is now a long series of new tax legislation enacted over the past 18 months, is still not across the finish line as of the time of this writing. Approximately half a dozen moderate House Democrats refused to sign on to the $1.85 Trillion bill on Friday, November 5. Instead, they insisted on seeing the overall cost estimated by the nonpartisan Congressional Budget Office (CBO) before committing their support. As a result, this legislation appears poised to trudge along for at least another week.

President Biden urged all House members to vote yes, but these holdouts remained throughout the evening Friday. The Build Back Better bill has unanimous opposition among Republican members of the House. Because of this, Democrats can afford very few defections.

As part of an agreement to secure their votes for the infrastructure bill passed Friday, the Democrat holdouts committed to voting yes on the Build Back Better bill as soon as they receive the information from the CBO.

With negotiations still under way, there are likely to still be minor changes before passage by the House. Therefore, the below summary is based on the November 3 version of the Build Back Better bill as summarized by the Joint Committee on Taxation (JCT) and the House Rules Committee (HRC). It would still require passage by the Senate, where more changes are expected in order to secure the necessary votes.

The Build Back Better bill includes eight different sets of provisions:


Individual Provisions

Business Provisions

Energy Provisions

International Tax Provisions

Bond Provisions

Health Provisions

Benefit Provisions

IRS Administration Provisions


Here, we highlight a few of the key individual and business provisions of the Build Back Better bill.


Select Individual Provisions in the BBB bill

  • An exclusion from gross income for benefits from the newly created comprehensive paid leave provided under the Social Security Act.
  • An increase in the limitation on the itemized deduction for state and local taxes, from $10,000 to $80,000.
  • An extension, through 2022, of the expansion of the child tax credit under the American Rescue Plan Act. This includes (i) the increase in the age limit of a qualifying child from 16 to 17, (ii) the increase in the amount of the credit from $2,000 to $3,000 (and to $3,600 for qualifying children under age 6), and (iii) the application of the initial income phase-out thresholds of $150,000 (joint filers), $112,500 (head of household filers), and $75,000 (all other taxpayers).
  • An exclusion from gross income for Federal Pell grants used for expenses other than qualified tuition, like room and board. In addition, an exclusion of amounts paid as a Federal Pell grant when determining expenses eligible for the American Opportunity Tax Credit or the Lifetime Learning Credit.
  • An expansion of the Net Investment Income Tax. Business income for those with greater than $400,000 in taxable income (single) or $500,000 (joint) would become subject to it.
  • A permanent disallowance of excess business losses (net business deductions that exceed business income) for noncorporate taxpayers. These excess business losses carry forward to offset future business income.
  • An above-the-line deduction of up to $250 of dues paid to a labor organization.

Select Business Provisions in the BBB bill

  • Imposition of a corporate alternative minimum tax on a corporation’s Adjusted Financial Statement Income (AFSI) at the rate of 15%, if AFSI exceeds $1 billion.
  • An excise tax of 1% on the value of any stock repurchased by a publicly traded corporation.
  • An investment tax credit of 5% to 25% for advanced manufacturing facilities. The top of that range would be available to those taxpayers paying prevailing wages and utilizing registered apprenticeship programs.
  • An elimination of the special 75% and 100% exclusion rates that apply to gains from the sale of certain qualified small business stock for taxpayers with adjusted gross income of $400,000 or more. The baseline 50% exclusion would remain available to all qualified taxpayers.
  • An inclusion of commodities, currencies, and digital assets in the existing wash sale rules. This prevents taxpayers from claiming tax losses while essentially retaining an interest in the asset.
  • An increase in the amount of qualified childcare expenses eligible for the employer-provided childcare credit, from 25% to 50%. In addition, an increase to the maximum annual credit to $500,000.


These are only a few of the provisions contained in the Build Back Better bill and, as mentioned earlier, more changes are likely before passage by the Senate. If you have questions about the numerous other provisions or would like any additional information about those highlighted above, please reach out to us to schedule a consultation.

We at Culpepper CPA are continually monitoring the legislation and are committed to staying on top of the latest developments.


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