Are We Only Looking at a Four-Year Extension of TCJA
Based on projected costs of any TCJA extension, it is likely it won't be for longer than 4-5 years
The current projections for the cost of a full extension of the Tax Cuts and Jobs Act (TCJA) tax provisions is about $4-5 trillion over 10 years. Even if Congress was to factor in the offset for raised revenues from additional tariffs, it is likely that most Republicans would only be comfortable with an increase in the projected deficit of perhaps $2 trillion over 10 years.
This means that the most likely outcome is an extension of the TCJA for at most five years and perhaps even less. With the extension starting in 2026, this means the tax cuts would expire after 2029 for a four-year extension and a year later for a five-year extension.
We will keep you posted, and we should have a fairly good idea on the extension by the first quarter of 2025.