One U.S. Interest Deduction Limit is Eased, Another Still Lurks

Senate Democrats just made it easier for companies to keep their interest payments tax-deductible, but another, even tougher limit on deducting interest is waiting in the wings—and it stands to cost tens of millions of dollars a year for some.

A new Senate Finance Committee version of President Joe Biden’s tax plan softens a proposal to limit interest deductions for multinational companies that have too much of their global interest in the U.S. But the bill doesn’t change a separate tightening of interest-deduction limits slated to kick in next month that is broader and, for some companies, harsher.

Companies can ...