Income Tax Topics of Interest

On December 18, 2015, the Protecting Americans from Tax Hikes Act of 2015, known as the “PATH Act” was signed into law. It made permanent 22 provisions, extended 4 provisions through 2019 and extended 30 provisions through 2016. In addition, it addressed numerous other provisions relating to program integrity, IRS procedures, other tax relief and tax administration.

Among the permanent extenders were tax relief for families and individuals, incentives for charitable giving, incentives for growth, jobs, investment and innovation, as well as incentives for real estate investment. Tax relief provisions included the child tax credit, the American Opportunity Tax Credit, earned income tax credit, educator expense deduction, employer- provided mass transit and parking benefits, and the sales tax deduction being made permanent at the same levels or increasing the amounts of relief. Charitable giving included capital gain real property made for conservation, tax-free distributions from IRA plans, and basis adjustment to S corporation stock. Work-related provisions included research credit, section 179 property, bonus depreciation, and S corporation built-in gains.

The five year extenders were new markets tax credit, work opportunity tax credit, bonus depreciation and look-through treatments regarding foreign corporations.

Included in the two year extenders were tax relief for families and individuals, incentives for growth, jobs, investment and innovation, incentives for energy production and conservation, as well as numerous other provisions. Tax relief provisions included discharged principal residence indebtedness, mortgage insurance premiums deduction, and the tuition and fees deduction. Work-related provisions included expensing for film and television productions, empowerment zone tax incentives, medical device excise tax, and numerous other industry-specific or territory- specific extenders. Energy provisions included nonbusiness energy property credit, manufacturers of energy-efficient homes credit, energy-efficient commercial building deduction, and other energy credits. Other provisions included program integrity related to compliance filing employee and nonemployee tax forms and returns, safe harbor for de minimis errors, issuance of ITINs, prevention of certain retroactive credit claims, and stricter reporting of education credit information. Other miscellaneous provisions were changes to work colleges program, 529 plan distributions, ABLE program expansion, rollovers into SIMPLE plans, changes to REITs, and various IRS and Tax Court reforms.