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Congress Retroactively Extends Over 30 Tax Provisions

Congress Retroactively Extends Over 30 Tax Provisions

The Bipartisan Budget Act of 2018, passed by Congress and signed by President Trump on Feb. 9, 2018, retroactively extends over 30 tax provisions that had expired at the end of 2016. This one year extension applies to the extended provisions and is effective for 2017 only. Many of the extended provisions are related to energy credits which are especially important for businesses and individual taxpayers. The extended provisions include:

  • Exclusion of a discharge of qualified principal residence indebtedness of up to $2 million ($1 million for married individuals filing separately) from gross income.
  • Treatment of mortgage insurance premiums as qualified residence interest for purposes of the mortgage interest deduction, subject to a phase out based on adjusted gross income. 
  • Above-the-line deduction for qualified tuition and related expenses, subject to a phase out based on adjusted gross income. 
  • The nonbusiness energy property credit of up to $500 for qualifying energy efficient improvements.
  • The 30 percent nonrefundable credit for the purchase of a) qualified fuel cell property; b) qualified small wind energy property; and c) qualified geothermal heat pump property.
  • Credits for qualified fuel cell motor vehicles as well as two-wheeled electric plug-in vehicles. 
  • Extension of the biofuel producer credit as well as biodiesel and renewable diesel credits.
  • The new energy efficient home credit for the construction of qualified new energy efficient homes.
  • The 179D deduction for the cost of energy efficient commercial building property.
  • The alternative fuels credit, which includes the propane credit.
  • Various other energy credits related to solar, wind and thermal properties.
  • Empowerment zone tax incentives for those residing in eligible zones.
  • Native Indian employment credit for qualified wages paid to this targeted group.

The Act also mandates the creation of a new tax form, Form 1040SR, for taxpayers over age 65. The form will be similar to Form 1040-EZ, while still allowing for reporting of social security benefits, retirement distributions, and other deferred payments.

For more information on the extenders listed above and other tax reform items, contact us in one of our many locations.

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