During National Entrepreneurship Week, Congressman Vern Buchanan, Vice Chairman of the House Ways and Means Committee, alongside Congressman Mike Kelly, Chairman of the Ways and Means Tax Subcommittee, announced growing support for the ACA-endorsed American Innovation Act (H.R. 1778) — legislation aimed at strengthening startup formation and reducing early financial barriers for entrepreneurs.
The bill would:
- Increase the first-year startup cost deduction from $5,000 to $20,000
- Raise the phase-out threshold from $50,000 to $120,000
- Expand eligibility to include partnerships and S corporations
Senator Marsha Blackburn has also announced plans to lead companion legislation in the Senate.
“ACA commends Congressman Buchanan and Congressman Kelly for their reintroduction of the American Innovation Act. Expanding the ability for early stage small businesses to deduct their start-up costs will provide entrepreneurs with a much needed capital boost. The American Innovation Act provides help for start-up companies at their most critical early stage time,” said Pat Gouhin, CEO.
Reducing upfront startup costs is intended to help founders reinvest more capital into hiring, operations, and growth during their earliest stages. Federal data shows many businesses launch with limited initial capital and face high failure rates within their first five years, highlighting the importance of policies that improve early-stage financial flexibility.
ACA joined a coalition of national business and innovation organizations in endorsing the legislation. Read the official press release here.
