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Individual Tax

As we enter tax season, these extenders haven’t been extended

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

Joint Committee on Taxation: List of Expiring Federal Tax Provisions 2017-2027

Legislation to extend “extenders,” i.e. tax provisions with termination dates that are typically extended, has not been enacted. As we enter tax season, here is a listing of those extenders, that, as noted in a recent report by the Joint Committee on Taxation (JCT), have not been extended to 2018.

Background. The Code contains dozens of temporary tax provisions—i.e., provisions with a fixed termination date. Often, these expiring provisions are temporarily extended for a short period of time (e.g., one or two years).

Many of these extender provisions would have been extended through the end of 2018 by a the Retirement, Savings, and Other Tax Relief Act of 2018 and the Taxpayer First Act of 2018 (H.R. 88). However, on Dec. 10, 2018, that bill was revised so as to not include those extensions.

On January 15, Charles Grassley (R-IA), Chairman of the Senate Finance Committee stated that his goal is to guide extenders legislation to final enactment. However, he acknowledged that he does not have a specific plan and that no hearings on the subject have been scheduled.

List of extenders that haven’t been extended to 2018. On January 19, the JCT released its annual report on the temporary individual, business, and energy tax extender provisions. This report contains a section that serves as a reminder of the extender provisions that expired at the end of 2017.

The provisions can be fit into three categories—those primarily affecting individuals, those primarily affecting businesses, and being energy-related provisions.

The expired individual provisions are:

… the above-the-line deduction for certain higher-education expenses, including qualified tuition and related expenses, under Code Sec. 222;

… the treatment of mortgage insurance premiums as qualified residence interest under Code Sec. 163(h)(3)(E); and

… the exclusion from income of qualified canceled mortgage debt income associated with a primary residence under Code Sec. 108(a)(1)(E).

The expired business provisions are:

… the Indian employment tax credit under Code Sec. 45A(f);

… accelerated depreciation for business property on Indian reservations under Code Sec. 168(j)(9);

… the American Samoa economic development credit (P.L. 109-432, Sec. 119);

… the railroad track maintenance credit under Code Sec. 45G(f);

… 7-year recovery for motorsport racing facilities under Code Sec. 168(i)(15);

… the mine rescue team training credit under Code Sec. 45N(e);

… the election to expense advanced mine safety equipment under Code Sec. 179E(g);

… special expensing rules for film, television, and live theatrical production under Code Sec. 181;

… empowerment zone tax incentives under Code Sec. 1391(d)(1)(A);

… 3-year depreciation for race horses two years or younger under Code Sec. 168(e)(3)(A)(i); and

The expired energy provisions are:

… the beginning-of-construction date for nonwind facilities to claim the production tax credit (PTC) or the investment tax credit (ITC) in lieu of the PTC under Code Sec. 45(d) and Code Sec. 48(a)(5);

… the special rule to implement electric transmission restructuring under Code Sec. 451(k);

… the credit for construction of energy efficient new homes under Code Sec. 45L;

… the energy efficient commercial building deduction under Code Sec. 179D;

… the nonbusiness energy property credit under Code Sec. 25C;

… the alternative fuel vehicle refueling property credit under Code Sec. 30C(g);

… incentives for alternative fuel and alternative fuel mixtures under Code Sec. 6426(d)(5) and Code Sec. 6427(e)(6)(C);

… incentives for biodiesel and renewable diesel under Code Sec. 40A(a)Code Sec. 6426(c)(6)Code Sec. 6426(e)(3) and Code Sec. 6427(e)(6)(B);

… second generation (cellulosic) biofuel producer credit under Code Sec. 40(b)(6)(J);

… credit for production of Indian coal under Code Sec. 45(e)(10)(A);

… special depreciation allowance for second generation (cellulosic) biofuel plant property under Code Sec. 168(l);

… the credit for qualified fuel cell vehicles under Code Sec. 30B; and

… the credit for 2-wheeled plug-in electric vehicles under Code Sec. 30D(g)(3)(E)(ii).

Tax forms and instructions. A sampling of the relevant 2018 tax forms/instructions, as they existed at the time we went to press, indicates that those forms/instructions reflect the fact that the above extenders do not apply for 2018 tax years.

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