We are sharing an important update regarding the recent release of draft reconciliation legislation by the Senate Finance Committee. While still subject to change as it advances through the legislative process and reconciliation with the House, several provisions in this draft bill could have meaningful implications for the senior living industry. Argentum is monitoring these developments closely and will continue to provide timely updates as the process unfolds. Below is a summary of key highlights from the draft legislation most relevant to senior living providers. (Please note: This is not a comprehensive review.)
You can access the full bill text from the Senate Finance Committee here.
Key Highlights for Senior Living Operators Medicaid Assisted Living Programs
The Senate’s draft bill, like its House counterpart, does not propose any direct cuts to Medicaid waiver programs. Argentum will remain vigilant in evaluating any provisions that may indirectly impact Medicaid funding streams critical to assisted living communities.
New Tax Deduction for Seniors – Sec. 70103
A new temporary deduction of $6,000 is introduced for seniors aged 65 and older (and their spouses, if filing jointly). This deduction begins to phase out at $75,000 in modified adjusted gross income ($150,000 for joint returns) and is available for tax years 2025 through 2028. Importantly, social security numbers must be included for both spouses to qualify.
Permanent Expansion of the Low-Income Housing Tax Credit – Sec. 70422
A permanent 12% increase to state housing credit allocations would support the development and rehabilitation of affordable rental housing. The bill also lowers the bond-financing threshold from 50% to 25% for project eligibility starting in 2026—an encouraging change for providers developing senior living housing options.
No Tax on Overtime – Sec. 70202
This new provision introduces a deduction of up to $12,500 ($25,000 for joint filers) for qualified overtime compensation. With a phase-out beginning at $150,000 ($300,000 joint), this change may help ease the tax burden on caregivers and staff who work additional hours—an especially relevant issue in today’s workforce climate.
Third-Party Litigation Funding Reform – Sec. 70605
A new tax framework targets third-party litigation financing. Investors funding lawsuits in exchange for financial returns would be taxed at the top individual rate plus 3.8%, with proceeds excluded from gross income and capital asset treatment. A 50% withholding requirement would apply to distributions, with select exemptions and carveouts.
Carried Interest Deduction
Unlike the House bill, the Senate draft omits references to the carried interest deduction, setting the stage for further negotiations between chambers.
Provisions Not Applicable to Assisted Living but Worth Monitoring
Provider Taxes – Sec. 71120
Although this provision does not directly impact assisted living, it limits how states can adjust provider taxes and use directed payments—policy levers that could influence funding structures broadly across long-term care.
Staffing Rule for Skilled Nursing Facilities – Sec. 71113
The draft bill prohibits the U.S. Department of Health and Human Services from implementing or enforcing the final federal staffing rule for nursing homes issued by the Biden administration. While this does not apply to assisted living, Argentum is monitoring developments that could set precedent or influence future regulatory considerations.
What’s Next?
As the Senate and House move toward negotiating a final package, Argentum remains fully engaged with policymakers to ensure the priorities of assisted living communities are heard and addressed. We will keep you informed every step of the way. If you have any questions or need clarification on any of the provisions discussed above, please contact Argentum’s policy team directly.
