Ensuring Better Interest Treatment and Deductibility Act (EBITDA)
Key claim: The Ensuring Better Interest Treatment and Deductibility Act (S4221) would modify federal tax rules governing business interest deductibility in relation to EBITDA.
Abstract
(S4221 · 119th Congress) Latest action (2026-03-26): Read twice and referred to the Committee on Finance.
Why this matters
The §163(j) business interest deduction limitation currently uses an EBIT-style measure of adjusted taxable income (since 2022), which tightens allowable interest deductions for leveraged and capital-intensive businesses. Reverting to an EBITDA-based cap would broaden deductible interest, shifting tax burden away from borrowers with heavy depreciation/amortization (private equity portfolio companies, real estate, manufacturing) and reducing federal revenue. The bill’s introduction signals continued Senate interest in reversing a TCJA-scheduled tightening, though it remains at the referral stage.