Good news for the S corporation community! Ways and Means Member Brad Wenstrup (R-OH) has introduced the S Corporation Modernization Act of 2024 (H.R. 8614).  S-Corp Mod has a long history of simplifying the rules for Main Street businesses and helping the Main Street businesses be more competitive as they remain in the family.

The introduction of this year’s bill will help S-Corp move forward on a list of technical tax provisions important to the country’s 5 million S corporations, including:

  • Increasing their access to capital;
  • Expanding the list of eligible shareholders to include more employees, non-resident aliens, and retirement accounts; and
  • Eliminating rules that penalize S corporations compared to partnerships and other business forms.

The S corporation was created by Congress in 1958 and has grown in popularity over the years, particularly among small- and family-owned businesses, because of its simplicity and flexibility. Today, S corporations are the most common form of business structure in America with more than 5 million. Despite their popularity, the rules governing S corporations can have the effect of restricting their ability to invest and create jobs, which is why the Wenstrup bill is so important.

As S-Corp readers know, Representative Wenstrup has been a long-time champion of our issues. In his statement introducing the bill, he made clear the importance of these reforms:

“S Corporations are the backbone of American business, located in every city and town across America, especially in rural areas like Southern Ohio. As Congress works to build upon the success of the Tax Cuts and Jobs Act, it’s critical that S Corps aren’t forgotten. The S Corporation Modernization Act contains important changes to the tax code that will make it easier for S Corps to operate and access capital so that they can grow, employ more Americans, and continue to invest in the communities in which they operate.”

S-Corp Board Member Dan McGregor, Chairman of Ohio-based McGregor Metal, praised Representative Wenstrup and his legislation:

“While our business has grown over the years, many of the rules governing S corporations have remained the same. This legislation makes important and timely improvements to those rules, making it easier for businesses like ours to raise capital, create jobs, and make succession plans. Representative Wenstrup is to be congratulated for his long-term commitment to helping S corporations succeed.”

S-Corp President Brian Reardon made the following statement in support of the bill’s introduction:

“Well into the 21st century, America’s most popular form of small-business corporation deserves rules adapted to the economy we live in today. The S Corporation Modernization Act would ensure the continued success of these businesses by modernizing the rules that apply to firms that have selected S corporation status.”

S Corporation Modernization has a long history of support from the business community, and its introduction today means we now have a sponsor sitting on the critical House Ways and Means Committee with six months of legislative session to go. S-Corp is gearing up to ensure that the priorities of the S corporation community are represented in any tax bill considered later this year.