To amend the Internal Revenue Code of 1986 to modify the railroad track maintenance credit.
To amend the Internal Revenue Code of 1986 to modify the railroad track maintenance credit.
Plain Language Summary
# Summary of HR 516: Railroad Track Maintenance Credit **What the bill does:** HR 516 would increase a tax credit that helps railroad companies pay for track maintenance. Currently, companies can claim up to $3,500 per year for each mile of track they own or lease. This bill would nearly double that limit to $6,100 per mile, and would automatically adjust this amount for inflation starting in 2026.
The bill would also expand which railroad tracks qualify for the credit. **Who it affects:** This tax credit primarily benefits short-line and regional railroad companies—smaller operators that maintain their own track infrastructure. These companies would receive larger tax breaks to offset maintenance costs, potentially allowing them to invest more in repairs and upgrades. **Current status:** The bill is currently in committee, meaning it has been introduced in the House but has not yet been debated or voted on by the full chamber. It was sponsored by Representative Mike Kelly (R-PA).
CRS Official Summary
This bill increases the annual limit on the tax credit for qualified railroad track maintenance expenses (also referred to as the short line railroad tax credit) and expands eligibility for claiming the credit.Under current law, the tax credit is limited each tax year to $3,500 multiplied by the sum of the number of miles of railroad track owned or leased by the taxpayer (miles owned or leased) and the number of railroad track miles assigned to the taxpayer by a Class II or III railroad (miles assigned). This bill increases the annual limit to $6,100 multiplied by the sum of miles owned or leased and miles assigned. The $6,100 amount used in the calculation of the tax credit limit is adjusted for inflation for tax years beginning after 2025.The bill also expands eligibility for the tax credit to include gross expenses for maintaining railroad tracks owned or leased as of January 1, 2024. Under current law, the tax credit is limited to gross expenses for maintaining railroad tracks owned or leased as of January 1, 2015.
Latest Action
Referred to the House Committee on Ways and Means.