House Passes Tax Extenders

On Wednesday, December 3, 2014, the House of Representatives passed a $42 billion package that would extend the nearly 50 tax provisions in the “tax extenders” bill through the end of 2014, putting the measure on a path toward President Obama’s desk. The breaks – known collectively as “extenders” – include a range of tax incentives for businesses, individuals, and non-profits. 

House Republicans turned to the one-year extension after talks between Senate Majority Leader Harry Reid (D-Nev.) and Ways and Means Committee Chairman Dave Camp (R-Mich.) over the broader deal broke down following a veto threat from President Obama. While the one year deal is not ideal, lawmakers from both parties echoed sentiments that it’s a start and better than no deal at all.

Senate Finance Committee Chairman Ron Wyden (D-OR) told reporters on Thursday that the Senate would not amend the House bill, setting the stage for an up-or-down vote, probably within a week.However, Majority Leader Harry Reid (D-Nev.) said Thursday night that the Senate might not be able to pass the House tax extenders bill before the end of the year. Reid said it was “imperative” for the Senate to pass a government funding bill and a defense spending measure before adjourning for the year but that senators would have to wait and see if a tax deal makes it to the floor. “Everyone knows we have to do a spending bill. Everyone knows we have to do a defense bill,” Reid said on the Senate floor. “Everyone knows that we’re trying to do some tax extenders. We’re trying to do that, but we’ll see.” For now, it’s a waiting game to see what if any action will be taken by the Senate.

List of Extenders Passed in the House on December 3, 2014

Provision 10-year revenue effect of 1 year extension (2015-2024, Millions of Dollars)
Individual Extenders
Above-the-line deduction for teacher classroom expenses

-$214

Discharge of indebtedness on principal residence excluded from gross income of individuals

-$3,143

Parity for exclusion from income for employer-
provided mass transit and parking benefits

-$10

Mortgage insurance premiums treated as qualified  residence interest

-$919

Deduction for State and local general sales taxes

-$3,142

Contributions of capital gain real property made for conservation purposes

-$129

 Above-the-line deduction for qualified tuition and related expenses

-$300

Tax-free distributions from IRAs to certain public
charities for individuals age 70-1/2 or older, not
to exceed $100,000 per taxpayer per year

-$384

Business Extenders
Research credit

-$7,629

Minimum LIHTC rate for non-Federally subsidized new buildings (9%)

$2

Military housing allowance exclusion for determining area median gross income

$2

Indian employment tax credit

-$62

New markets tax credit

-$978

Railroad track maintenance credit

-$207

Mine rescue team training credit

-$3

Employer wage credit for activated military reservists

-$1

Work opportunity tax credit

-$1,375

Qualified zone academy bonds

-$126

Classification of certain race horses as 3-year  property

$0

15-year straight-line cost recovery for qualified  leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements

-$2,382

 7-year recovery period for motorsports entertainment complexes

-$33

Accelerated depreciation for business property
on an Indian reservation

-$79

Bonus depreciation

-$1,492

Enhanced charitable deduction for contributions
of food inventory

-$143

Increased expensing limitations and treatment of
certain real property as section 179 property

-$1,434

Election to expense mine safety equipment

$0

Special expensing rules for certain film and
television productions

-$6

Deduction allowable with respect to income
attributable to domestic production activities in
Puerto Rico

-$109

Modification of tax treatment of certain payments
under existing arrangements to controlling exempt
organizations

-$18

Treatment of certain dividends of RICs

-$97

Treatment of RICs as “qualified investment
entities” under section 897 (FIRPTA)

-$44

Exception under subpart F for active financing
income

-$5,082

Look-through treatment of payments between
related CFCs under foreign personal holding company
income rules

-$1,154

Exclusion of 100 percent of gain on certain
small business stock

-$881

Basis adjustment to stock of S corporations
making charitable contributions of property

-$51

Reduction in S corporation recognition period for
built-in gains tax

-$94

Empowerment zone tax incentives

-$251

Temporary increase in limit on cover over of rum
excise tax revenues (from $10.50 to $13.25 per proof
gallon) to Puerto Rico and the Virgin Islands

-$168

American Samoa economic development credit

-$14

Energy Tax Extenders
Credit for section 25C nonbusiness energy
property

-$832

Second generation biofuel producer credit

-$25

Incentives for biodiesel and renewable diesel

-$1,297

Credit for the production of Indian coal

-$38

Beginning-of-construction date for renewable
power facilities eligible to claim the electricity
production credit or investment credit in lieu of
the production credit

-$6,392

Credit for construction of energy-efficient new
homes

-$267

Special allowance for second generation biofuel
plant property

$2

Energy efficient commercial buildings deduction

-$127

Special rule for sales or dispositions to
implement Federal Energy Regulatory Commission
(“FERC”) or State electric restructuring policy for
qualified electric utilities

$0

Excise tax credits relating to certain fuels

-$397

Alternative fuel vehicle refueling property

-$41

Other
Automatic extension of amortization periods

-$28

Extension of shortfall funding method and
endangered and critical rules

$0

Total

-$41,599

Note: Details differ from total due to rounding.
Source: Joint Committee on Taxation

 

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