Authored By James L. Hamilton
Contact 847.441.8800
Email: jhamilton@weisscpa.com

Tax “Extender” Provisions in the Bipartisan Budget Act of 2018

On February 9, Congress passed, and the President signed into law, the “Bipartisan Budget Act of 2018, (BBA)” after a brief government shutdown occurred overnight. The BBA retroactively extends through 2017 over 30 so-called “extender” provisions, provides a number of miscellaneous tax-related provisions, and includes tax relief to victims of the California wildfires and Hurricanes Harvey, Irma, and Maria.

These tax changes include, but are not limited to:

Individual Extender Provisions

The BBA extended the following individual provisions for one year:

  • Exclusion for discharge of indebtedness on a principal residence
  • Treatment of mortgage insurance premiums as deductible qualified residence interest
  • Deduction for qualified tuition and related expenses

Business Extender Provisions

The BBA extended the following business provisions for one year (except as noted):

  • Indian employment tax credit
  • Railroad track maintenance credit
  • Mine rescue team training credit
  • 3-year depreciation for race horses two years old or younger
  • 7-year recovery period for motorsports entertainment complexes
  • Accelerated depreciation for business property on an Indian reservation
  • Election to expense advanced mine safety equipment
  • Expensing rules for certain film, television, and live theatrical productions
  • Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico
  • The alternative 23.8% maximum tax rate for qualified timber gains of C corporations
  • Empowerment zone tax incentives under

Energy Extender Provisions

The Budget Act extended the following energy provisions for one year (except as noted below):

  • Credit for certain nonbusiness energy property
  • Credit for residential energy property
  • Qualified fuel cell motor vehicle credit under
  • Alternative fuel vehicle refueling property credit under
  • Credit for construction of new energy efficient homes
  • Five year extension and phase-out of energy investment credits
  • Energy efficient commercial buildings deduction
  • Extension of special rule for sales or dispositions to implement Federal Energy Regulatory Commission (“FERC”) or State electric restructuring policy for qualified electric utilities
  • Extension of excise tax credits and outlay payments for alternative fuel, and excise tax credits for alternative fuel mixture

IRS

The IRS on February 9 released the following statement: “The IRS is reviewing the legislation signed Feb. 9 that retroactively extended and modified numerous tax provisions covering 2017. We are assessing these significant changes in the tax law and beginning to determine next steps. The IRS will provide additional information as quickly as possible for affected taxpayers and the tax community.”

We Can Help

The new laws impact just about everyone and are extremely complex. At Weiss & Company, we can provide a comprehensive review of your situation and the tax-saving opportunities available to you.


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