Official Summaries

This bill increases the annual limit on the tax credit for qualified railroad track maintenance expenses (also referred to as the short line railroad tax credit) and expands eligibility for claiming the credit.

Under current law, the tax credit is limited each tax year to $3,500 multiplied by the sum of the number of miles of railroad track owned or leased by the taxpayer (miles owned or leased) and the number of railroad track miles assigned to the taxpayer by a Class II or III railroad (miles assigned). This bill increases the annual limit to $6,100 multiplied by the sum of miles owned or leased and miles assigned. The $6,100 amount used in the calculation of the tax credit limit is adjusted for inflation for tax years beginning after 2025.

The bill also expands eligibility for the tax credit to include gross expenses for maintaining railroad tracks owned or leased as of January 1, 2024. Under current law, the tax credit is limited to gross expenses for maintaining railroad tracks owned or leased as of January 1, 2015.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 516 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 516

To amend the Internal Revenue Code of 1986 to modify the railroad track 
                          maintenance credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 16, 2025

Mr. Kelly of Pennsylvania (for himself and Mr. Thompson of California) 
 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 modify the railroad track 
                          maintenance credit.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATION OF RAILROAD TRACK MAINTENANCE CREDIT.

    (a) Increase in Credit Amount.--
            (1) In general.--Section 45G(b)(1)(A) of the Internal 
        Revenue Code of 1986 is amended by striking ``$3,500'' and 
        inserting ``$6,100''.
            (2) Inflation adjustment.--Section 45G of such Code is 
        amended by adding at the end the following new subsection:
    ``(f) Inflation Adjustment.--
            ``(1) In general.--In the case of a taxable year beginning 
        after 2025, the $6,100 amount in subsection (b)(1)(A) shall be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2024' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
            ``(2) Rounding.--Any increase determined under paragraph 
        (1) which is not a multiple of $100 shall be rounded to the 
        nearest multiple of $100.''.
    (b) Qualified Railroad Track Maintenance Expenditures.--Section 
45G(d) of the Internal Revenue Code of 1986 is amended by striking 
``January 1, 2015'' and inserting ``January 1, 2024''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures paid or incurred in taxable years beginning after 
December 31, 2024.
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