Details of a final agreement among House and Senate Republicans emerged yesterday and this morning -- including rate cuts for “C” corporations, individuals and pass-through businesses. Here’s a summary of what the conferees have agreed to, according to lawmakers and our conversations with tax counsel for the respective committees -- and how the new plan differs from bills that passed both chambers earlier. The Conference Committee summary of the compromise bill, which we are studying now, can be found on our website.

Corporate Tax Rate

Joint Agreement: Cut the corporate rate to 21 percent from 35 percent, beginning in 2018. House: Cut to 20 percent in 2018. Senate: Cut to 20 percent in 2019.

Top Individual Tax Rate

Joint Agreement: Cut the top rate to 37 percent for the highest earners, down from 39.6 percent. House: Leave top rate at 39.6 percent. Senate: Cut top rate to 38.5 percent.

Pass-Through Entity Deduction

Joint Agreement: Provide a 20 percent deduction against pass-through business income, and extend that break to trusts as well as individuals/sole proprietors. But a last minute cap was added, which phases out the deduction for owners earning more than $315,000 (married filing jointly) from the business. House: Tax such business income at a top rate of 25 percent, but service businesses like accounting and law firms wouldn’t be eligible. Provide a lower rate of 9 percent for some lesser-earning businesses. Senate: Provide a 23 percent deduction, with limitations related to taxable income and amount of wages paid. A last minute amendment allowed deduction for owners of professional service firms whose taxable income is less than $500,000 (MFJ) or $250,000 (single or MFS).

Corporate Alternative Minimum Tax

Joint Agreement: Repeal it. House: Repeal it. Senate: Maintain it.

Obamacare Individual Mandate

Joint Agreement: Repeal it. House: No action. Senate: Repeal it by zeroing out the tax penalty for individuals who don’t purchase health insurance.

Mortgage Interest Deduction

Joint Agreement: Cap it at loans of $750,000 -- down from $1 million -- for new purchases of homes. House: Cap it at loans of $500,000. Senate: No change.

Individual State and Local Tax Deductions

Joint Agreement: Limit combined deductions for state and local income, sales and property taxes to $10,000 annually. House: Repeal deduction except for property taxes, capped at $10,000. Senate: Repeal deduction except for property taxes, capped at $10,000.

R&D Tax Credits, etc.

Preserves the R&D income tax credit as well as the low-income housing credit and retains the tax-preferred status of so-called private activity bonds which are often used to encourage construction of low income housing and infrastructure projects.

Rates on Offshore Earnings:

Under current law, multinational companies can defer paying U.S. income taxes on their foreign earnings until they return, or “repatriate,” them to the U.S. The deferral provision and reduced tax rates in other countries have led companies to stockpile those earnings overseas.

The House voted last month to tax those companies’ stockpiled offshore earnings (estimated to be over $3 trillion) at 14 percent for income held as cash, and 7 percent for less-liquid assets. The Senate’s bill this month set those rates at 14.5 and 7.5 percent, respectively.

As Republican leaders of the two chambers worked on compromise legislation to send to President Trump late next week, many of the changes -- including a lower rate for the highest-earning individuals and restoring or enhancing some personal tax deductions and child tax credits -- increased the bill’s revenue cost. We are reviewing the just released compromise bill in order to verify the revised rates.

We expect the bill to be voted on first by the Senate early next week with two ailing Senators—John McCain and Thad Cochran—then by the House, although there has been discussion of reversing that order. If the bill survives a Senate vote, then this ship should have relatively smooth sailing.