Bill Details
HR.2463 - 119th Congress
Status
Latest action
2025-03-27 - Referred to the House Committee on Ways and Means.
Introduced Date
2025-03-27
Policy Area
Taxation
Committees
View committees (1)
Cosponsors
View cosponsors (1)
8
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AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would create a new tax credit for businesses that pay labor costs to install mechanical insulation. The credit would equal 10% of those labor costs. The goal is to encourage insulation upgrades on heating, cooling, and other mechanical systems so they waste less energy. The bill also says the credit would only apply to certain systems and installations, and it would end after 2028.
- The credit would apply only to labor costs for installing mechanical insulation on a mechanical system that is in the United States and can be depreciated for tax purposes.
- The system being insulated must have been in service for at least one year before the insulation is installed.
- The insulation must meet the minimum standards in Reference Standard 90.1 and must help reduce energy loss from the system.
- Businesses could not also take a tax deduction for the same costs that are used to claim the credit. The credit would apply to costs paid or incurred after December 31, 2025, and would not apply to costs after December 31, 2028.
Official Summaries
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Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2463 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2463
To amend the Internal Revenue Code of 1986 to provide a credit for the
labor costs of installing mechanical insulation property.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 27, 2025
Ms. Sanchez (for herself and Mr. Fitzpatrick) introduced the following
bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide a credit for the
labor costs of installing mechanical insulation property.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mechanical Insulation Installation
Incentive Act of 2025''.
SEC. 2. LABOR COSTS OF INSTALLING MECHANICAL INSULATION PROPERTY.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 45BB. LABOR COSTS OF INSTALLING MECHANICAL INSULATION PROPERTY.
``(a) In General.--For purposes of section 38, the mechanical
insulation labor costs credit determined under this section for any
taxable year is an amount equal to 10 percent of the mechanical
insulation labor costs paid or incurred by the taxpayer during such
taxable year.
``(b) Mechanical Insulation Labor Costs.--For purposes of this
section--
``(1) In general.--The term `mechanical insulation labor
costs' means the labor cost of installing mechanical insulation
property (including property assembled offsite) with respect to
a mechanical system referred to in paragraph (2)(A) which was
originally placed in service not less than 1 year before the
date on which such mechanical insulation property is installed.
``(2) Mechanical insulation property.--The term `mechanical
insulation property' means insulation materials, and facings
and accessory products installed in connection to such
insulation materials--
``(A) placed in service in connection with a
mechanical system which--
``(i) is located in the United States, and
``(ii) is of a character subject to an
allowance for depreciation,
``(B) in a manner that meets or complies with the
minimum requirements of Reference Standard 90.1 (as
defined in section 179D(c)(2)), and
``(C) the installation of which results in a
reduction in energy loss from such mechanical system.
``(c) Termination.--This section shall not apply to mechanical
insulation labor costs paid or incurred after December 31, 2028.''.
(b) Credit Allowed as Part of General Business Credit.--Section
38(b) of such Code is amended by striking ``plus'' at the end of
paragraph (40), by striking the period at the end of paragraph (41) and
inserting ``, plus'', and by adding at the end the following new
paragraph:
``(42) the mechanical insulation labor costs credit
determined under section 45BB(a).''.
(c) Conforming Amendments.--
(1) Section 280C of such Code is amended by adding at the
end the following new subsection:
``(i) Mechanical Insulation Labor Costs Credit.--
``(1) In general.--No deduction shall be allowed for that
portion of the mechanical insulation labor costs (as defined in
section 45BB(b)) otherwise allowable as deduction for the
taxable year which is equal to the amount of the credit
determined for such taxable year under section 45BB(a).
``(2) Similar rule where taxpayer capitalizes rather than
deducts expenses.--If--
``(A) the amount of the credit determined for the
taxable year under section 45BB(a), exceeds
``(B) the amount of allowable as a deduction for
such taxable year for mechanical insulation labor costs
(determined without regard to paragraph (1)),
the amount chargeable to capital account for the taxable year
for such costs shall be reduced by the amount of such
excess.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by adding at
the end the following new item:
``Sec. 45BB. Labor costs of installing mechanical insulation
property.''.
(d) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after December 31, 2025, in taxable
years ending after such date.
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