As part of the sweeping new tax legislation aimed at strengthening American businesses, several updates will significantly impact how your company handles interest deductions, employee leave, meals, and capital investments. Here's a breakdown of what business owners and CFOs need to know:

Interest Deductions Get a Boost

Under prior law, the deduction for business interest expense was capped at 30% of adjusted taxable income (ATI), but the calculation method was more favorable before 2022. The new bill removes the 2022 cutoff, making the more generous pre-2022 calculation permanent.

Why it matters:

For capital-intensive businesses (manufacturing, real estate, etc.), more interest expense will now be deductible, freeing up cash flow and reducing taxable income.
Applies to tax years starting after December 31, 2024

Also:

The definition of floor plan financing now includes recreational trailers and campers, making interest on these types of inventory eligible for special treatment.

Expanded Credit for Paid Family and Medical Leave (Section 45S)

The employer credit for paid family and medical leave has been extended and enhanced.

Two new options:

Wage-based credit — based on wages paid directly to employees on leave.
Insurance-based credit — if the employer uses a private insurance policy, they can now claim a credit based on the premiums paid.

Additional enhancements:

Employers can elect a 6-month tenure requirement instead of 1 year.
Part-time workers who average at least 20 hours/week are now eligible.
The law clarifies coordination with state-mandated leave, ensuring you don't double-dip but still receive credit for employer-funded benefits.

Effective for tax years starting after December 31, 2025

Section 179 Expensing Limits Are Increased

Section 179 allows businesses to immediately expense certain capital asset purchases instead of depreciating them over time.

New limits:

Deduction cap increases to $2.5 million (up from $1M)
Phase-out threshold increases to $4 million (up from $2.5M)

These changes help small and midsize businesses write off more upfront capital investments — such as equipment, software, and qualifying vehicles.

Applies to property placed in service in tax years starting after December 31, 2024

New 100% Depreciation for "Qualified Production Property"

A new special depreciation allowance has been introduced for certain U.S.-based production facilities.

Who qualifies:

Businesses constructing or renovating nonresidential real estate used for:
- Manufacturing, production, or refining of tangible goods
- Construction beginning between Jan 20, 2025 and Dec 31, 2028
- Property must be placed in service by Jan 1, 2031

Key points:

Full 100% depreciation in the first year
Property used for admin, sales, research, or software dev does not qualify
If the property use changes within 10 years, recapture rules apply (i.e., you'll owe back some tax)

This is essentially a massive tax incentive for domestic production, especially in manufacturing, energy, or heavy industry sectors looking to build or expand facilities.

From higher expensing limits to enhanced employee leave credits and more generous depreciation options, these updates are geared toward boosting domestic investment and rewarding U.S. job creators.