In an overwhelming vote of 378 to 46, the House of Representatives passed a one-year extension on 55 tax provisions which expired at the end of 2013, so called “tax extenders.” The tax extenders bill includes numerous popular business tax breaks, like the research credit (with a price tag of $7.6 billion according to the Joint Committee on Taxation), the new markets tax credit ($978 million), bonus depreciation ($1.5 billion), renewable fuels, corporate expensing, and the Subpart F exception for active financing income. The bill also includes some popular tax breaks for individuals like residential mortgage debt forgiveness ($3.1 billion) and deductions for state and local taxes ($3.1 billion), The tax extenders bill is projected to cost about $45 billion over 10 years.
While some Senators had continued to push a two-year extension in order to give more certainty to taxpayers, it appears that the one-year extension, through 2014, will be accepted by the Senate. Senate Finance Chairman Ron Wyden (D-Ore.), who had been pushing a two-year extension, appears to have conceded, with his spokesperson saying that “we are disappointed that at this point there doesn’t appear to be a procedural path forward” for the two-year extension. The bill comes after Congress came under intense pressure to pass an extender bill before year end (especially in light of a failed negotiation to make some permanent; see our prior post) so as to restore certainty to millions of workers and businesses who will shortly begin filing their tax returns.