The Consolidated Appropriations Act included several new relief packages for individuals and businesses. As we dissect the current bill, YHB is producing a series of in-depth analysis on the bill to help you take advantage of the bill. In this article, we will explore the tax extenders.
The new bill offers several tax extenders for prior tax law that was set to expire at the end of 2020. These extensions were either allowed for one, two, or five more years. Some of the extenders were made permanent. Below are the major extenders that impact most individuals:
- The medical expense deduction floor is set to 7.5 percent of adjusted gross income
- Energy efficient commercial building deductions
- Decrease in excise taxes for some brewers and distillers of alcohol
5 Year Extenders:
- Employer credit for paid family and medical leave
- Work opportunity credit
- The ability to exclude discharge of indebtedness on a principal residence
- The ability to exclude from income employer’s paying student loan payments for employees.
2 Year Extenders:
- Residential energy-efficient property credit
- Solar and Residential Energy-Efficient property investment credits
1 Year Extenders:
- Nonbusiness Energy Property credit of up to 10 percent of the property.
Should you have any questions, contact a YHB advisor today!
Additional articles in this series:
- Overview of Second Round of PPP Funds
- New Rules Related to PPP Loan Forgiveness
- Major Changes to Meals Expense Deductions for Tax Years 2021 and 2022
- Employment Credit for Schedule C Businesses
- Additional Payroll Help from the New Stimulus Bill
- Change for Residential Rental Property Depreciation