The RESILIENCE Act of 2025 would modify how adjusted financial statement income (AFSi) is calculated for certain public utility property. Specifically, it would require AFSi to be reduced by depreciation deductions allowed under section 167 and by applicable public utility repair and maintenance deductions allowed under section 162, but only to the extent those deductions are taken into account in computing taxable income for the year and pertain to property described in section 168(i)(10). The bill also directs adjustments to ensure depreciation already reflected on the taxpayer’s financial statements is not double-counted, and to align treatment with other items the Secretary may specify. The changes would apply to taxable years beginning after December 31, 2024. The short title is the Repair Expenditures Support Infrastructure, Labor Investment, Energy Needs, and Creates Equity Act of 2025 (the RESILIENCE Act).
Key Points
- 1Short title: The bill designates the act as the RESILIENCE Act of 2025, also known as the Repair Expenditures Support Infrastructure, Labor Investment, Energy Needs, and Creates Equity Act of 2025.
- 2Core change to AFSi: Section 56A(c)(13) is amended to require AFSi to be reduced by (A) depreciation deductions under section 167 for property to which section 168 applies, and (B) applicable public utility repair and maintenance deductions under section 162 for such property, to the extent those deductions reduce taxable income for the year.
- 3Specific deductions targeted: The “applicable public utility repair and maintenance deductions” are repairs and maintenance expenditures related to property described in section 168(i)(10) owned by the taxpayer and treated as depreciation on the taxpayer’s applicable financial statement.
- 4Avoid double counting: The bill requires adjustments to disregard any depreciation expense already reflected on the taxpayer’s applicable financial statement for the relevant property, and to account for any other items the Secretary may specify to ensure consistent treatment.
- 5Effective date: The amendments apply to taxable years beginning after December 31, 2024.