Small Business and Consumer Credit Act of 2026
- Bill Number
- H.R. 9383
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Status
- Introduced
- Latest Action
- 2026-06-22: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-07-10T10:23:22Z
AI-Generated Summary
Purpose
The legislation amends the Internal Revenue Code of 1986 to establish special rules for handling net operating losses (NOLs, which occur when a business's deductible expenses exceed its taxable income in a given year) of certain financial institutions. Its stated goal is to provide extended periods for carrying forward or carrying back these losses to offset income in other tax years, potentially aiding affected institutions in managing tax liabilities.
Key Provisions
- Special NOL Rules by Year:
- For taxable years beginning after December 31, 2026, and before January 1, 2028: Eligible institutions may elect to carry forward an NOL for up to 20 subsequent tax years.
- For taxable years beginning after December 31, 2027, and before January 1, 2029: Eligible institutions may elect a 1-year carryback to the prior tax year and a 20-year carryforward.
- For taxable years beginning after December 31, 2028: Eligible institutions may elect a 2-year carryback to the two prior tax years and a 20-year carryforward.
- Definition of Specified Financial Institutions: This includes standalone banks (as defined under section 581 of the Code), certain members of affiliated groups that include banks (with exceptions for specific types under the Bank Holding Company Act), and banks under section 585(a)(2)(B).
- Election Process: Institutions must elect the rules in a manner prescribed by the Secretary of the Treasury, by the due date of their tax return for the loss year; elections are irrevocable once made.
- Conforming Changes: Updates to existing NOL carryback and carryforward rules in section 172(b)(1) to integrate the new provisions.
- Effective Date: Applies to NOLs arising in tax years beginning after December 31, 2026.
Significant Changes to Existing Law
This bill introduces new subparagraph (D) to section 172(b)(1), creating tailored NOL treatment for specified financial institutions that differs from general rules (which typically limit carrybacks and carryforwards). It redesignates the prior subparagraph (D) as (E) and adjusts references in other subsections for consistency. Unlike standard NOL rules, these provisions allow optional extended carry periods tied to specific future years and require affirmative elections.
Potential Impacts
- On Government Agencies: The Internal Revenue Service would need to process and verify elections, potentially increasing administrative workload for tax filings and audits related to these institutions.
- On Citizens and Businesses: Affected financial institutions could reduce their tax payments by offsetting losses against income in other years, which might indirectly support lending or credit availability for small businesses and consumers (as suggested by the bill's title).
- On International Relations: No direct effects are outlined in the legislation.
Main Stakeholders Affected
- Specified financial institutions, particularly smaller or independent banks and their affiliated groups.
- Taxpayers within these institutions, who would benefit from the extended NOL flexibility.
- The Department of the Treasury and IRS, responsible for implementing the election and carry rules.
Notable Legal, Constitutional, or Political Implications
The changes are limited to tax code modifications and do not raise apparent constitutional issues, such as challenges under the Commerce Clause or due process. Politically, the bill focuses on domestic tax relief for a narrow group of financial entities without broader policy shifts. All elections and applications remain subject to existing IRS oversight and court review processes.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (9)
Rep. Moore, Gwen [D-WI-4], Rep. Tenney, Claudia [R-NY-24], Rep. Sewell, Terri A. [D-AL-7], Rep. Moran, Nathaniel [R-TX-1], Rep. DelBene, Suzan K. [D-WA-1], Rep. Yakym, Rudy [R-IN-2], Rep. Beyer, Donald S. [D-VA-8], Rep. Miller, Max L. [R-OH-7], Rep. Horsford, Steven [D-NV-4]
Recent Actions
- 2026-06-22: Referred to the House Committee on Ways and Means.
- 2026-06-22: Introduced in House
- 2026-06-22: Introduced in House
Bill Versions
- Small Business and Consumer Credit Act of 2026 — issued 2026-06-22 — PDF (5 pages)